- GS-2: India Economy & Neighbourhood
- GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Production Linked Incentives for Speciality Steel Sector and benefits
- Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi, approved the Production Linked Incentive (PLI) Scheme for specialty steel.
- The duration of the scheme will be five years, from 2023-24 to 2027-28.
- The Production-linked Incentive (PLI) Scheme for Specialty Steel will prove to be a game-changer for the steel sector in the country and will make India Aatmanirbhar in producing specialty steel.
Benefits of the scheme:
- With a budgetary outlay of ₹6322 crores, the scheme is expected to bring in investment of approximately ₹40,000 crores and capacity addition of 25 MT for speciality steel.
- The scheme will give employment to about 5,25,000 people of which 68,000 will be direct employment.
- It is expected that the speciality steel production will become 42 million tonnes by the end of 2026-27.
- With this scheme, India’s export of specialty steel will become around 5.5 million tonnes as against the current 1.7 million tonnes of specialty steel getting FOREX of Rs 33,000 crore and production will touch 42 million tonnes by the end of 2026-27.
What is specialty steel?
- Specialty steels are composed of the additional alloyed materials that results into special properties of the final product hence they are also are called as alloy steels.
- The steels are engineered wherein normal finished steel is worked upon by way of coating, plating, heat treatment, etc. to convert it into high-value-added steel to provide a superior performance under specific conditions.
- The resultant high value-added steel which can be used in various strategic applications like Defense, Space, Power, apart from automobile sector, specialized capital goods etc.
Significance of the choosing the specialty steel
- Speciality steel has been chosen as the target segment because out of the production of 102 million tonnes steel in India in 2020-21, only 18 million tonnes value added steel/speciality steel was produced in the country.
- Apart from this out of 6.7 million tonnes of imports in the same year, approx. 4 million tonnes import was of specialty steel alone resulting in FOREX outgo of Approx. Rs. 30,000 crores.
- By becoming Aatmanirbhar in producing speciality steel, India will move up the steel value chain and come at par with advanced steel making countries like Korea and Japan.
- This will ensure that approximately 2.5 lakh crores worth of speciality steel will be produced and consumed in the country which would otherwise have been imported.
Can you attempt this question now?
- “Production Linked Incentives Scheme for Specialty Steel will prove to be a game-changer for steel sector”. Discuss.