......Spicy  Shots             .

R.Ranganathan M.Sc., [ MBA - IIMA]     Just some blunt, forthright views       on some subjects / outfits

I am an Indian with fundamental rights to pen boldly:    Links for this section:   hit list   or   sitemap 3

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In my view, The Government was helping Cartel formation quietly till it suited them. SAIL, [Steel Authority of India] a Government of India controlled company, is the largest producer of Steel in India. 

Can a cartel be formed or run effectively, without the cooperation of the largest producer ? I do not understand why the Press and others overlook this basic fact and give unbalanced reports. 

These Ministers and the Prime Minister should forthwith resign if what they said is true because they failed 

Steel Sales have gone up. But the Indian annual steel sales is going up by 12% per annum. Sail, has done better than the Market despite cost push and no special orders or spurt for any of its products if you check Segment Revenues

The Profit is much more, if you add up the nearly 2000 Crores extra provisioning done in March 08 Quarter for expected wage revision. 

 why ? All the steel makers whined about increase in the price of Iron Ore and Coking Coal cost in the last 12 months. All sang in Chorus and in a shrill voice. Sail's Raw Material cost and Power & Fuel cost have not gone up to the extent of the shouts. The figures prove that. Despite 3+9% = 12% Cost increase, the profit went up by 21.7%. 

 Public shareholding in SAIL is less than 15%. Government holds the remaining 85% or major chunk of it. To sum up, Government ran the Cartel in a way

Sail and the Ministers should pay a price for it. But will they ? No. We have a sleeping Press

Steel accounts for about 3.6% of the WPI or 3.6 out of 100. Let us say that the steel price has doubled to 7.2  The total being 100%, distortion due to steel, can still be 7.2 only and not 21.3%. 

If The marginal rise in inflation over the weeks is due to the excess price increases in steel to the extent of 21.3%, it is highlighting a minor part to hide the major factor / bungle if any. It is also a stupid self defeating mad chase.

The items taken into account, the weightage and the methodology in arriving at the WPI is shoddy. They continue to use the defective measuring scale and naturally, decisions based on that can get skewed. Ahuwalia now makes some comments. What was he doing till now ? 

On 2nd May, 2008, cast iron was the factor for 48% of marginal rise. Next week, it can be Air conditioners. Then Vegetables prices go up in Summer / by end May 2008. You chase like a street dog one factor after another without self conviction and thought. Government paying 40% more to employees almost in one stroke does not lead to inflation or ripple effect ! In my view, if the know all Chidambaram is sacked, inflation can come down below 6% 

What about Cement that goes into Construction with that Steel ? Go and Cry. Different parameters are used for 2 Industries defying Logic and commonsense. [Cement Industry's lobbying power seems poor] Do you not the step motherly treatment / disjointed efforts. 

Old Iron ore mines have been leased at Rs 25 per ton and the export price of iron ore is 170 Dollars or about Rs 7000/-.  [ Iron ore and Lime stone mines prices are not ad valorem / percentage of Sales duties. Do they not belong to the people of India ? On Petrol, Government charges ad valorem duties - different mechanism for no sane reason. refer Petrol Pricing ]

2005-2006   Saleable steel capacity  11.76 million metric tons

2009-10      Saleable steel capacity   21.18 million metric tons

The iron ore production has been estimated to go up to the level of 35 MT per annum. The plan includes developing two major mechanised iron ore mines – at Rowghat in the western region and Chiria in the east. Both the mines will be developed with latest technology to ensure assured supply of required quantity of quality iron ore to SAIL plants.

The total coking coal requirement is likely to increase from the current level of 15 MT to around 28 MT by 2010. Plans are on the anvil to enter into strategic investments/ tie-ups for coking coal blocks in India and abroad to ensure assured supply of Coking coal. SAIL’s corporate plan envisages investment in collieries at Tasra, Ramnagore, Chasnalla and Jitpur. [ all in India ]