Nearly ten per cent of the total incentive earmarked for the steel sector, under the latest AatmaNirbhar Bharat 3.0 stimulus package, will be dedicated to CRGO steel, it is reported.
The Union finance minister, on November 12, 2020, announced a slew of incentives, as part of the AatmaNirbhar Bharat 3.0 package. In this, production-linked incentives are to be provided to ten “champion” sectors. Specialty steel is among these ten sectors.
It is now learnt that CRGO (cold rolled grain oriented) steel will also be entitled to incentives, amounting to nearly 10 per cent of the total for specialty steel.
Reliable reports suggest that $855 million (around Rs.6,380 crore) worth of production-linked incentives will be given to the specialty steel sector, over a five year period. Out of this, CRGO steel will get $77 million (Rs.575 crore), or roughly 10 per cent.
Apart from attracting foreign investment and technology for the manufacture of special steels in India, the scheme will also focus on encouraging local manufacture of specialty steel on which India is import-dependent.
CRGO steel, or simply CRGO, is a special form of steel that is used in the manufacture of transformer. In fact, the efficiency of a transformer is directly proportional to the quality of CRGO used. India today is completely dependent on imports of CRGO, and attempts to start local production of this critical input have not yielded results for over five decades now.
There are only around a dozen suppliers of CRGO steel worldwide, and India currently meets its entire domestic demand from imports. Some years ago, the Indian government mandated that all international suppliers of CRGO steel should have their products BIS-certified. This was done with a view to curbing the usage of scrapped/inferior CRGO, which severely compromises the efficiency of transformers.
In FY20, India had imported 217,000 tonnes of CRGO steel. In the current fiscal year (FY21), CRGO steel imports stood at 44,800 tonnes in the first four months (April to July).
