NEW DELHI (Commodity Online): India’s steel giant SAIL has decided to expand its operations in a big way with the state-owned company earmarking Rs 12,254 crore in the next financial year for funding its new projects.

All the steel PSUs in India like SAIL, NMDC, and Rashtriya Ispat Nigam (RINL) are ready with a capital expenditure programme of Rs 17,164 crore for 2010-11, with the country’s largest steel maker spending over 70 per cent of the amount.

However, SAIL will not get any budgetary support and the entire Rs 12,254 crore fund will have to be generated from internal and extra budgetary resources.

SAIL is undertaking a Rs 70,000-crore expansion plan to up its annual production capacity to about 23 million tonne by 2012 from the present 14 MT.

RINL is also doubling its capacity to about 6.2 MT, at an estimated investment of about Rs 12,000 crore. The capital expenditure programme of the port-based steel firm stands at Rs 4,049 crore for 2010-11, almost double of the fund spent during the current fiscal.

The country’s largest iron ore producer NMDC, which is gearing up for about Rs 15,000 crore follow-on-public offer, will be spending about Rs 611 crore in 2010-11 on its expansion and diversification programmes.

The firm is setting up a plant in Chhattisgarh with a capacity of 3mtpa and is also working on JVs with Tata Steel, and ArcelorMittal among others. The Budget has also made provisions for Rs 115.82 crore for miner MOIL, Rs 75 crore for iron ore firm KIOCL, among others.

Meanwhile, SAIL said hike in excise tax rate would add to the inflationary pressure in the economy.

With two per cent increase in tax, steel prices in the country might go up by Rs 600 per tonne. There is also an increase in the prices of fuels in the country. All this will add a pressure to the inflation in the country, SAIL said.

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