India has not fulfilled key infrastructure capacity creation targets during the country's 11th five-year plan period (2007-12) which ended on March 31, 2012, except for the power sector, according to a presentation of the planning commission of the Indian government.
The number of projects awarded for ports during the period was three against a target of 23. The three new ports still in progress will add 79 million mt of capacity against a target of 226 million mt that would have been achieved by 23 new ports.
During the period in question, coal production was 540 million mt against a target of 554 million mt, while road construction projects awarded were for 7,000 km against a target of 7,300 km. However, in the power generation sector, new capacity of 20,501 MW was achieved during the period against a target of 17,601 MW.
Against this backdrop, India's Ministry of Steel has forecast a bearish outlook for the steel industry during the 12th five-year plan period (2012-17). According to the ministry, during 2007-12 average annual growth of steel demand and consumption were 5.8 percent and 8.8 percent respectively. This was lower than the 9.4 percent and 10.4 percent for demand and consumption respectively achieved during the previous five-year period of 2002-07.
The ministry has forecast an average annual steel consumption growth of 9.1 percent through 2017, but on the assumption of eight percent growth in the gross domestic product (GDP). In 2011-12, India recorded a nine-year low GDP growth rate of 6.5 percent. The average GDP growth over the last five years was recorded at 8.8 percent.
The Indian government has set a steel production target of 108 million mt by 2017, up from current level of 70 million mt, requiring an additional 91 million mt of iron ore and 47 million mt of coking coal. With a ban on iron ore mining in several key states like Karnataka and Goa in wake of widespread illegal mining and the steel industry's 70 percent import dependency in sourcing coking coal, availability of iron ore and coking coal has been identified by the ministry as crucial bottlenecks in achieving the targeted growth in steel production, according to ministry's working group for framing outlines for the 12th five-year plan period.