The steel industry will benefit if the government invests more on infrastructure which will lead to an increase in the demand for steel, Tata Steel Global CEO and managing director T N Narendran has said.
He said that he hoped that in the forthcoming Union budget the government would spend more on infrastructure.
“If you invest in infrastructure, the demand for steel goes up. You cannot build infrastructure without steel,” he said.
“If the government invests more and more in infrastructure or intends to do so, it is good for the industry,” he said when asked about the forthcoming budget.
Optimistic about the infrastructure push by the government and make in India efforts, the Tata Steel board has already taken a call to expand the Kalinganager integrated steel project to eight million tonne from three million tonne now at an investment of ₹ 23,500 crore, to be completed within 48 months.
A rights issue for an amount not exceeding ₹12,800 crorehas been approved by the board. The total capacity of Tata Steel India operations following the above expansion will be 18 million tonne per annum
Narendran also pointed higher production will lead to multiple benefits like lowering of cost of steel production and will remove at least some inefficiencies in logistics.
“In India logistics is a bigger issue which drags you down but once you build infrastructure some of these issues get addressed,” he said.
He said that the automobile business was doing good and construction sector and rural economy is also picking up.