Food security law will help spur demand for steel

The National Food Security Bill, awaiting Parliament’s nod, will be a boon to the steel industry which is currently seeing a slowdown, according to Dilip Oommen, Managing Director and CEO of Essar Steel.

The Bill, which he hoped would be voted into law soon, would require hundreds of silos to be built across the country to store foodgrain that can ensure food security to. To build the grain silos, large quantities of steel would be required, depending on their size and the materialused. This would increase demand for steel.

Growing sector

Oommen pointed out that“Even otherwise, grain silos need to be built in large numbers to store the large quantities of rice and wheat produced,” Oommen told

Business Line . “Millions of tonnes of foodgrain go rotten or get destroyed by rodents everywhere because of the paucity of grain silos.” India produced 246 million tonnes of rice, wheat, coarse grains and pulses in the 2011-12 financial year. Despite the economic slowdown the steel industry was growing, Oommen pointed out.

However, the rate of growth, which was close to 10 per cent till recently, had slowed to 3.5 per cent. He noted that there was a direct relationship between economic growth and steel consumption. “The higher the economic growth, the higher the demand for steel,” he said. “Economic growth will boost infrastructure development.”

Oommen said investments in infrastructure should be scaled up substantially for economic growth, but conducive government policies were essential.

basheer.kpm@thehindu.co.in