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Part - VI

Price Trends of Sponge Iron (Hot Briquette Iron HBI)
and Scrap for the past year

Reforms in the power sector
Power is like a raw material to this industry and 60% of cost of production of steel is power. Electricity tariffs in India are the highest in the entire globe these should be rationalized since it puts a huge financial burden on the companies. Also there is differential power tariff in the adjoining states and as a result the industry becomes unviable in one state compared to another. In Rajasthan and Madhya Pradesh the power tariff is nearly Rs.5 per unit whereas the power tariff in Chattisgarh is less than Rs.3 per unit. The Government should check these varying tariffs. Also it has been found that the smaller and less productive players are able to survive in the market by evading power and tax payments. Evading power payments gives them significant advantage over larger players. Reforming power sector, especially the distribution system, will ensure prevention of power thefts, thereby leveling the playing field between large and small players. Also having a uniform tariff structure will make the steel prices as stable in the domestic front.

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* Contributed by: -
Amit Chaddha,
B.E. (Metallurgy), MMS (Marketing),
School of Management Studies,
MNNIT Allahabad.