"If you look at it, most the growth in the GDP has come from the agriculture segment. While the construction sector accounts for 60 per cent of India's steel consumption, automobiles' contribution is around 15 per cent. Subdued steel consumption growth in the current fiscal year is mainly due to poor demand for commercial vehicle and construction segments as they were "struggling", Mr Narendran said. Steel consumption grew by just 0.5 per cent in the country during the first 10 months of the current fiscal year due to subdued economic growth. If the GDP growth is 5 per cent, I am expecting demand should grow by 6 per cent," he said. Typically, steel demand grows by 1.2 to 1.3 per cent of the GDP growth. "Next year's GDP forecast is 5-7 per cent. Mr Narendran, however, is hopeful of steel demand picking up next fiscal year by at least 6 per cent as the country's economy is projected to grow by 5-7 per cent. The Kalinganagar project, which will essentially produce flat products, will have 3 mtpa capacity in the first phase.įlat products are mainly used in automobile and consumer durable sectors, the demand for which has not increased on the expected lines in the current fiscal due to subdued economic growth. The Odisha project is the second integrated unit of the home-grown steel major in India after Jamshedpur, where it recently completed borwnfield expansion to enhance capacity to 10 million tonnes per annum (mtpa). It will start production from the fourth quarter of next fiscal," Tata Steel managing director T V Narendran told PTI. In 2025, if and when the project reaches its terminal capacity of 12 mtpa, the cost will swell to Rs 50,000 crore.Tata Steel will start production from its greenfield plant at Kalinganagar in Odisha from the last quarter of next fiscal year (2014-15). But the extra payout and time overrun saw the cost of project go up nearly 75 per cent to Rs 26,000 crore. A more than generous relief and rehabilitation package that included higher compensation for the land, job guarantees, money for building houses and a monthly maintenance allowance, won over the agitation.
Tata persevered in Odisha and started work in right earnest in 2010. Narendran, Chief Executive Officer, Tata Steel. We ignored the naysayers, went to work on the ground and slowly, bit by bit, got the project back on track," says T.V.
"Our early troubles in Kalinganagar saw a lot of people writing us off on the project. Critics had said Kalinganagar would meet the same fate. Unlike Kalinganagar, though, that project was doomed and resurrected itself only on the other side of the country in Gujarat. Around the same time its small car Nano's project was facing similar resistance in neighbouring West Bengal. The House of Tatas was being fed this bitter medicine two at a time. The sense of injustice among the local population who had been offered just Rs 37,000 per acre by the government back in 1993, however, outweighed everything. Surely, it was in Kalinganagar's interest to have the steel behemoth's second plant in the vicinity. It has helped establish Jamshedpur - one of the most modern cities in India that has laid the marker on what a model township ought to be like. Tata is a household name in the country and held in much esteem by most. Everything came to a standstill for the next five years. It only escalated matters and the viability of the project itself came under question. Following a day of madness on January 2, 2005, 13 agitators were killed by local police trying to wrest control. Instead, it got bogged down in land acquisition hurdles and the ire of tribals who claimed they owned part of the land parcel that was handed over to the company by the state government. The factory was initially planned at a cost of Rs 15,000 crore and slated to start production by 2010.
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