Working Capital Management at Jindal Steel Works

10221 WordsDec 18, 201241 Pages
SECTION 1 - PROFILE STUDY OF JINDAL STEEL WORKS LTD INDUSTRY PROFILE INTRODUCTION TO STEEL INDUSTRY India’s economic growth is contingent upon the growth of the Indian steel industry. Consumption of steel is taken to be an indicator of economic development. While steel continues to have a stronghold in traditional sectors such as construction, housing and ground transportation, special steels are increasingly used in engineering industries such as power generation, petrochemicals and fertilisers. India occupies a central position on the global steel map, with the establishment of new state-of-the-art steel mills, acquisition of global scale capacities by players, continuous modernisation and upgradation of older plants, improving energy…show more content…
Undoubtedly there has been significant government bias towards public sector undertakings. But not all government action has been beneficial for the public sector companies. Freight equalization policies of the past were one example. The current governmental ‘moral-suasion’ to limit steel price increases is another. However, after liberalization—when a large number of controls were abolished, some immediately and others gradually—the steel industry has been experiencing new era of development. Major developments that occurred at the time of liberalization and thenceforth were: * Large plant capacities that were reserved for public sector were removed; * Export restrictions were eliminated; * Import tariffs were reduced from 100 percent to 5 percent; * Decontrol of domestic steel prices; * Foreign investment was encouraged, and the steel industry was part of the high priority industries for foreign investments and implying automatic approval for foreign equity participation up to 100 percent; and * System of freight ceiling was introduced in place of freight equalization scheme. As a result, the domestic steel industry has since then, become market

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