Mineral Based Industry — Question 15

The difficulties experienced by the iron and steel industry in India are-

1. Capital intensive — Huge amount of capital is required by the iron and steel industry and the plants have a long gestation period.
2. Obsolete technology — The machinery being used in the iron and steel plants is outdated.
3. Limited availability of Coking coal — The coal reserves of India are limited. Many steel plants import coking coal.
4. Sick industrial units — Due to inadequate supply of power and sharp increase in the cost of raw material, many steel plants are experiencing sickness or have been closed down.
5. Control of Prices — The government has fixed the price for iron and steel which leaves little margin of profit for the manufacturers.
6. Inefficiently managed public sector — Many public sector plants are facing strikes, lockouts, energy crisis caused by heavy investment on social overheads, poor labour relations, inefficient management and underutilisation of capacity.
7. Heavy demand — To meet the increasing demand, large quantity of iron and steel has to be imported.