Metal companies are in a deep freeze in most of the developed economies. But, China and India are shining exceptions. In India's case, demand is driven by both infrastructure building and greater consumption of automobiles and consumer durables. On the supply side, abundant raw materials, cheap labour and power make metal companies extremely cost competitive. If only we were able to exploit these factors by rapidly building up capacity. As per a leading business daily, India is likely to miss its target of 124 m tonnes of steel capacity by FY12 due to delays. India currently has an installed steel capacity of 64 m tonnes. True, there are many large projects being put up by both Indian as well as international giants. Steel makers like SAIL, Tata Steel, JSW, and Essar are expanding. Global giants like ArcelorMittal and Posco are also investing heavily. In fact, the domestic steel sector is attracting investment in the region of Rs 11 trillion. But many of them are plagued by delays. Due to reasons ranging from agitations over land acquisition to slow government clearances. Sure, issues like land acquisition must be handled with sensitivity. But, in our view, we must find a way of speeding up our pace when it comes to key areas like steel making. After all it drives much of the infrastructure creating India so urgently needs.
The return of jobs
Employment numbers are among the many indicators used to gauge the health of an economy. For example, one of the man causes of concern in developed economies is the soaring unemployment. Closer home, although India escaped much of the global financial turmoil, the buoyant job market did become sluggish during much of 2008. Seems like things have turned a full circle. The IT sector, one of the largest employers in the private sector, is back to its hiring ways. As per a leading business daily, India's largest IT firm, TCS, has made gross additions of over 21,000 employees during 9mFY10, while Infosys expects the gross hiring to be 24,000 in FY10. In fact, in 3QFY10, TCS made 7,692 net additions, as against net additions of 320 in the previous quarter. Campus hiring, which had dried up, is also back. Infosys plans to make 15,000 offers at campuses for FY11. Incentives and promotions are also back in vogue. Clearly, going by this indicator, the slowdown is well and truly behind us.