5.8.3 Under the recent policy changes, no licence is required to set up iron and steel units. These policy changes are expected to give impetus to Indian steel industry to grow freely and also attract private investment. The initial response of the private sector to these changes appears to be encouraging.
Non-Ferrous Metals 5.9.1 During the Seventh Plan period, the non-ferrous metals sector made impressive progress with completion of the prestigious, integrated, multi-locational Aluminium complex of National Aluminium Company Ltd.(NALCO), setting up of a captive power plant for Bharat Aluminium Company Ltd.(BALCO), modernisation and debottlenecking of copper smelters and refineries of Hindustan Copper Ltd. and expansion of Vizag Zinc smelters of Hindustan Zinc Ltd. as well as Binani Zinc Plant in private sector, thereby raising capacities for aluminium, copper and zinc as targetted for the Plan. From a position of dependence on imports, India has emerged as a net exporter of aluminium. As far as other major non-ferrous metals are concerned, the share of imports in the consumption of lead and zinc registered some decline, whereas in case of copper, despite expansion of the existing capacity, dependence on imports increased.
Aluminium 5.10.1 With the commissioning of Orissa Aluminium Complex of NALCO, the country has emerged as a net exporter of aluminium. However, this situation is expected to last only for a couple of years more and by 1994-95, the country may once again turn a net importer of aluminium.
5.10.2 Considering the advantageous position in the resource endowment and in view of the production being competitive, it would be desirable to maintain an exportable surplus. In this context, the proposed expansion of Hindustan Aluminium Company Ltd. (HINDALCO) by 1.5 lakh tonnes would merit a high priority. NALCO's expansion by 1.15 lakh tonnes would also need to be considered as soon as they stabilise their production from the present capac-
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ity. BALCO would need to concentrate on energy conservation and setting up of downstream capacity. A number of 100% EOU proposals for manufacture of alumina in the private sector have been made but these have been pending for quite some time now for want of finalisation of bauxite linkages. This needs to be expedited. Such plants could serve as the first step for setting up of aluminium smelters at a later date or joint ventures abroad for aluminium smelting.
Copper 5.11.1 During the Seventh Plan, a marginal increase in the capacity was achieved by debottlenecking and modernisation of the existing smelters of Hindustan Copper Limited (HCL) with small investments. Production of copper is not internationally competitive because of the low grade of copper deposits and small scale of operations in comparison to world standards. Malanjkhand copper deposit appears promising. After an evaluation of the results of the exploration and feasibility study currently under way, a view will be taken on augmenting copper production. Since the deposits in India are very low in copper content, possibilities of bio-acid leaching need to be examined.
Lead & Zinc 5.12.1 With the commissioning of Rampura-Agucha-Chanderiya integrated project of Hindustan Zinc Ltd. (HZL) in 1991-92, the country has achieved near self-sufficiency in zinc. The integrated project will need to stabilise its operations before embarking on any large scale expansion in the Eighth Plan. No major new projects are envisaged in the Eighth Plan except for a repaclement mine to feed Rajpura Dariba concentrator.
Nickel 5.13.1 The entire requirement of nickel in the country is imported. Considerable efforts made in the past for commercial production from large low grade nickel resources of Sukinda (Orissa) based on indigenous technology have not been successful. It will, therefore, be necessary to carefully examine the plans for indigenous production. It would be desirable to look for imported technology for upgradation of ores before taking any investment decision on production of nickel.
Gold 5.14.1 The gold deposits have been steadily getting poorer and deeper with production costs becoming increasingly uneconomic. The future of gold mining in India will depend on the low grade small scale deposits in which mill recovery is a sensitive factor. Mining of scattered shallow gold deposits will have to be considered. A new approach to gold exploration and recovery of gold from low grade ore deposits and tailings deserves consideration.
5.14.2 With the liberalisation of gold import and consequential decrease in the gold prices, the operations of Bharat Gold Mines Ltd. have become still more uneconomic. The cost of production is two to three times the selling price of gold and the company is heavily dependent upon budgetary support even for its current operations. A hard look at the future of the company is overdue. The possibility of induction of private partners and `state-of-the-art' technology and closure of some uneconomic mines with re-settlement of surplus manpower in new ventures will need to be explored.
A National Materials Initiative 5.15.1 There are significant and rapid changes taking place in the world of materials. The emerging unity of many disciplines and areas in materials science and technology; the growing integration of activities in the materials cycle ranging from design to disposal; the intensive engineering efforts for superior performance; the targetted, high priority and integrated efforts on materials in many countries and the large potential for materials technology-based industrial development in India, call for a coordinated Indian strategy in technology development and innovation, industrial structure, human resources development, infrastructure development and international linkages. Indian capability in Materials Scinence and Technology is large and diversified but is fragmented and has a poor impact on the production system. The Natinal Materials Policoy Project, under the auspices of the Technology Information, Forecasting and Assessment Council, Department of Science and Technology, has concluded that there is a priority need to promote a National Materials Initiative (NMI) to reach these objectives and has recommended the formation of a Materials Council with adequate resources to implement the strategy with and through other
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institutions, to make India a competitive world player in select materials. This will involve doubling our current national investment in materials technology development from about Rs. 125 crores per annum to Rs. 250 crores per annum by 1995.
5.15.2 Material Science and Technology will be the central instruments to achieve the goals of the National Mateiral Initiative. Research and Technology Developent in the f1lowing areas need to be promoted in collaboration with industry, R & D laboratories and Academmic Institutions:
Raw material upgradation;
Performance improvment of conventional materials;
Value added production;
Development of Advanced Materials;
Applications/use technology;
Materials use efficiency;
Synthesis, Processing and Manufacturing;
Energy intensity;
Substitution and Conservation;
Environmental Sustainability and
Materials Cycle linkages.
Material Technological Innovation in Industry can be promoted by a competitive environment as envisaged in the New Economic Policy. A "Materials Council", when formed can, by strengthening the infrastructure and appropriate joint funding arrangements, stimulate this process. One of the Council's tasks is to identify specific areas of priority and promote alliances and partnerships of various institutions for materials technology development and use. The Council will seek to coordinate the diverse ongoing efforts for synergy among them.
5.15.3 The Material Council, when established could be an autonomous body, and a collaborative venture of Industry, Government, S & T organisations and Financial Institutions. It could be set up through the initiative of the Department of Science and Technology and managed by an independent board. Initial funding by Government could be minimal in the Eighth Plan and larger resources can be raised with the help of financial institutions, international organisations, industry etc. A Materials Development Fund can be formed for this prupose. The main tasks of the Materials Council would be :
- Long term Industry/Technology forecasting and monitoring;
- Interagency coordination in materials technology;
-Promotion of partnerships and alliances among. industry, S & T and academic institutions for the development and commercialisation of technology;
-Integration of materials science and technology with corporate strategy at the industry level;
-International linkages development (import of technology, foreign investment, S & T cooperation agreement, etc.) and
-Information services and outreach efforts.
The Council's role will be to orchestrate, facilitate and catalyse various programmes rather than direct intervention. It will not seek to duplicate any efforts, but build on them. The experience of Japan, South Korea, European Community and United States of America suggest such an approach. The Council's performance in the long run is to be measured by the extent it has been able to promote a competitive and materials-technology-based industrial development.
Engineering Industry 5.16.1 The engineering industry provides the key to economic growth with its diversified forward and backward linkages with almost every sector of the national economy. The share of engineering in the total organised industrial activity is about 31.0% of the value of output, 33.2% of value added, 29.7% of employment and 28.4% of invested capital. During the Seventh Plan, output of the manufacturing sector as a whole grew at 8.8%, while the engineering industry grew at 10.5% per annum. This sector
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is mainly based on domestic resources and has good employment potential. The country has comparative advantage in this sector. However, the engineering industry has a number of weaknesses, the prominent being:
- Weak Design and Engineering base;
- Inadequate attention to modernisation and continued upgradation of technology;
Inadequate R & D;
- Absence of companies of international standards which can take up turn-key and consultancy projects;
- Demand constraint leading to low capacity utilization;
- Paucity of domestic financial resources and availability of "tied aid" leading to avoidable imports;
- High cost of raw materials and other inputs;
- High cost of credit/finance and duty structure;
- Absence of sustained export initative;
- Inadequate attention to training and manpower development;
- Overmanning, which has often prevented modernisation and also increased overheads;
5.16.2 The stress in the Eighth Plan will be on qualitative upgradation and elimination of the weaknesses mentioned above. Greater stress would need to be laid on import of drawings and designs, than on import of equipment. Establishment of closer linkages between academic institutions, manufacturers of equipment, users of equipment, national laboratories and the Government is also necessary.
Ship-Building and Ship-repair Industry 5.17.1 At present there are about 40 shipyards in India. Out of these, seven are in the public sector, two in the State sector and the remaining in the private sector. The private sector shipyards are allowed to construct vessels of any size. However, at present the private sector shipyards are not capable of building more than 10,000 DWT size crafts. In spite of so many Shipyards in the country, ship- building industry is in doldrums partly because of very high cost of indigenous ships, unduly long delivery periods and poor viability of the shipyards and partly because of the ability of foreign shipyards to offer ships at marginal cost and shorter delivery period consequent on world-wide recession in ship-building industry. Hence, it is not proposed to set up any new ship- building yards in the Eighth Plan. Efforts would, however, be made to improve productivity and viability of the existing yards. Certain other measures under consideration are introduction of revised pricing formula as recommended by BICP, treating the ship-building industry as 100% export oriented industry with all related benefits, allowing duty free imports up to a limit of 60% of the realisable price of the vessel, providing working capital loans to shipyards on soft terms, etc.
Ship Repair Facilities 5.17.2 The ship repair activity is far more profitable than ship- building. At the same time, substantial outgo of foreign exchange (to the tune of Rs.50 crores every year) on account of Indian vessels repairs at foreign shipyards can be avoided if domestic capabilities are strengthened. Keeping this in view, most of the units in this sector are drawing up plans to increase their capacities. The Government has recognised the strength of this industry and given it the status of deemed export industry. A number of concessions, as available to 100% export oriented units, have been provided.
Electronics 5.18.1 The electronics industry has the potential to be a powerful catalyst for improving productivity and efficiency in all sectors of the economy. It has achieved rapid growth, perhaps the fastest rate of growth among all industries over the past decade. The value of output of the electronics industry grew by about 25 per cent annually during the Sixth Plan and around 35 percent per annum during the Seventh Plan. However, India's production of electronic goods is presently less than one percent of the world production which is valued at over U.S. $ 750 billion per annum. The industry is employment-oriented and provides direct employment to around 2.60 lakh persons and indirect employment to approximately 5.20 lakh persons. The electronics exports especially
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software exports have recorded impressive increases but the import intensity of the sector is a cause for concern.
5.18.2 The status and weaknesses of the indigenous electronics industry have been detailed in para 5.3.9 above. The focus of attention in the Eighth Plan, in electronics industry would be on production at internationally competitive scales, encouraging export oriented production, technology development, manpower development, rural industrialisation and application of electronics in key socioeconomic sectors. In the area of computer software exports, where the country has comparative advantage, Software Technology Parks are being set up. These would require certain facilities like quick and easy communications, already provided in a few centres. A project on Value Added High Speed Data Communication Network for Software Exports is being implemented.
5.18.3 Electronics has a very significant role to play in increasing productivity and reducing costs in virtually every sector of the economy. Over the last few years certain technologies have been developed for introduction of electronic systems and controls in a number of industries such as steel, cement, paper and pulp, sugar, tea and power and also in the areas of agriculture, social infrastructure and strategic electronics, which are apppropriate for the needs of the country. In the Eighth Plan, efforts will be made for intensive application of these technologies in various sectors.
5.18.4 Another area needing attention is the training of manpower required for the electronics industry. In order to achieve the desired growth and to attract foreign investors, it has become necessary to ensure that adequately trained manpower is available. At present, training in electronics is being imparted both in Government and private institutions. Government has supported more than 450 institutions during the Seventh Plan. In the Eighth Plan, this aspect will be given special emphasis by introducing more and more job oriented courses at ITI level and Post Diploma/Degree level in the area of repair/maintenance of consumer electronics, industrial electronics, eleetro-medical equipment and computer systems. Some institutions like Centres for Electronics Design & Technology (CEDTs) etc. will generate special manpower in this field. Government is giving recognition to a number of private institutions engaged in various courses in computer education. Keeping in view the future requirement of manpower, there is an imperative need for augmenting and improving the training facilities available in ITIs, Polytechnics, Engineering Colleges and other institutions.
Fertilisers 5.19.1 During the Seventh Plan, four gasbased nitrogenous fertiliser plants at Aonla, Vijaipur, Jagdishpur (on HBJ line) and Namrup Expansion III and DAP project at Paradeep were commissioned. Four gas-based projects are under implementation at Babrala, Shahjahanpur and Kota along HBJ line and at Kakinada in Andhra Pradesh. Even after this, there will be a shortfall of about 3 million tonnes of nitrogen in 1996-97.
5.19.2 As the expansion of the existing units provides considerable savings in infrastructure and utilities, doubling of plants at Bijaipur, Aonla and Jagdishpur should be undertaken without further loss of time. Discovery of gas in Krishna-Godavari and Cauvery basins offers an opportunity to add small--sized gas--based plants in these regions. Subject to finding an effective transport route, surplus gas available in North Eastern region can be utilised for fertiliser production. There is also a need to promote use of low cost bio- fertilisers.
5.19.3 The raw material reserves for phosphatic fertilisers in the country are negligible. The choice is to import either rock phosphate and sulphur or intermediates like phos-acid or phosphatic fertiliser itself. The policy of a judicious mix of import of finished fertilisers and production of fertilisers through raw materials and intermediates would continue.
5.19.4 The prices of fertilisers are controlled. As retail prices are considerably lower than the fair cost of production plus freight, the manufacturers are compensated for the difference under the production-cum-transfer subsidy system. Calculation of fair prices is based on reasonable norms of production level, energy consumption, working capital margin etc. The pricing norms have been gradually tightened over successive pricing periods, each lasting 3
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