STANDING COMMITTEE ON COAL AND STEEL 17 (2015-2016) SIXTEENTH LOK SABHA MINISTRY OF STEEL Action Taken by the Government on the Observations/ Recommendations contained in the Ninth Report of the Standing Committee on Coal and Steel (Sixteenth Lok Sabha) on "Demands For Grants (2015-16)" SEVENTEENTH REPORT lR;eso t;rs LOK SABHA SECRETARIAT NEW DELHI December, 2015/Agrahayana, 1937 (Saka) SEVENTEENTH REPORT STANDING COMMITTEE ON COAL AND STEEL(2015-2016) (SIXTEENTH LOK SABHA) MINISTRY OF STEEL Action Taken by the Government on the Observations/ Recommendations contained in the Ninth Report of the Standing Committee on Coal and Steel (Sixteenth Lok Sabha) on "Demands For Grants (2015-16)" Presented to Lok Sabha on 22.12.2015 Laid in Rajya Sabha on 22.12.2015 lR;eso t;rs LOK SABHA SECRETARIAT NEW DELHI December, 2015/Agrahayana, 1937 (Saka) CC&S No. 103 Price : Rs.70.00 © 2016 BY LOK SABHA SECRETARIAT Published under Rule 382 of the Rules of Procedure and Conduct of Business in Lok Sabha (Fifteenth Edition) and printed by M/s. India Offset Press, A-1 Mayapuri Ind. Area, Phase 1, New Delhi 110064, INDIA CONTENTS PAGE COMPOSITION OF THE COMMITTEE................................................... (iii) INTRODUCTION.............................................................................. (v) CHAPTER I Report................................................................. 1 CHAPTER II Observations/Recommendations which have been accepted by the Government................................ 9 CHAPTER III Observations/Recommendations which the Committee do not desire to pursue in view of the Government's replies................................. 36 CHAPTER IV Observations/Recommendations in respect of which replies of the Government have not been accepted by the Committee.................... 37 CHAPTER V Observations/Recommendations in respect of which final replies of the Government are still awaited................................................... 41 ANNEXURES I. Statement of physical and financial performance with respect to trading and e-commerce business of the company during the 12th Five Year Plan..... 44 II. Minutes of the sitting of the Standing Committee on Coal and Steel (2015-16) held on 19.11.2015.... 46 III. Analysis of Action Taken by the Government on the Recommendations contained in the Ninth Report of the Standing Committee on Coal and Steel (Sixteenth Lok Sabha)........................................... 48 (i) COMPOSITION OF THE STANDING COMMITTEE ON COAL AND STEEL (2015-16) Shri Rakesh Singh — Chairperson MEMBERS Lok Sabha 2. Shri A. Arunmozhithevan 3. Shri Kalyan Banerjee 4. Shrimati Jyoti Dhurve 5. Shri Godam Nagesh 6. Shri Faggan Singh Kulaste 7. Shri Shailesh Kumar 8. Dr. Banshilal Mahato 9. Shri Devji Mansingram Patel 10. Shrimati Riti Pathak 11. Shrimati Ranjit Ranjan 12. Dr. Ravindra Kumar Ray 13. Shri Neiphiu Rio 14. Shri Tamradhwaj Sahu 15. Shri Tathagata Satpathy 16. Shri Janardan Singh "Sigriwal" 17. Shri Pashupati Nath Singh 18. Shri Rama Kishore Singh 19. Shri Sunil Kumar Singh 20. Shri Sushil Kumar Singh 21. Shri Krupal Balaji Tumane (iii) Rajya Sabha 22. Shri M.J. Akbar 23. Shri Ali Anwar Ansari 24. Dr. Pradeep Kumar Balmuchu 25. Shri Md. Nadimul Haque 26. Shri B.K. Hariprasad 27. Dr. Satyanarayan Jatiya 28. Shri Jugul Kishore 29. Shri Avinash Pande 30. Shri Sanjay Raut 31. Shri Dilip Kumar Tirkey SECRETARIAT 1. Shri Ravindra Garimella – Joint Secretary 2. Shri Ajay Kumar Garg – Director 3. Shri Arvind Sharma – Additional Director 4. Smt. Vandana P. Guleria – Sr. Committee Assistant (iv) INTRODUCTION I, the Chairperson, Standing Committee on Coal and Steel having been authorised by the Committee to present the Report on their behalf, present this Seventeenth Report (Sixteenth Lok Sabha) on Action Taken by the Government on the observations/recommendations contained in the Ninth Report of the Standing Committee on Coal and Steel (Sixteenth Lok Sabha) on "Demands for Grants (2015-16)" pertaining to the Ministry of Steel. 2. The Ninth Report (Sixteenth Lok Sabha) of the Standing Committee on Coal and Steel was presented to Lok Sabha on 24th April, 2015. Replies of the Government to all the observations/recommendations contained in the Report were received on 28th July, 2015. 3. The Standing Committee on Coal and Steel considered and adopted this Report at their sitting held on 19.11.2015. 4. An analysis on the Action Taken by the Government on the observations/recommendations contained in the Ninth Report (Sixteenth Lok Sabha) of the Committee is given at Annexure-III. 5. For facility of reference and convenience, the observations and recommendations of the Committee have been printed in bold letters in Chapter-I of the Report. NEW DELHI; RAKESH SINGH 3 December, 2015 Chairperson, 12 Agrahayana, 1937 (Saka) Standing Committee on Coal and Steel. (v) REPORT CHAPTER I This Report of the Standing Committee deals with Action Taken by the Government on the observations/recommendations contained in the Ninth Report (Sixteenth Lok Sabha) of the Standing Committee on Coal and Steel on Demands for Grants (2015-16) relating to the Ministry of Steel which was presented to Lok Sabha and laid in Rajya Sabha on 24.04.2015. 2. The Action Taken Replies have been received from the Ministry of Steel in respect of all the 24 observations/recommendations contained in the Report on 28.07.2015. These have been categorised as follows:— (i) Observations/Recommendations which have been accepted by the Government: Serial Nos. 1, 2, 3, 4, 6, 8, 9, 10, 12, 13, 14, 16, 18, 20, 21, 22, 24 Total: 17 Chapter-II (ii) Observations/Recommendations which the Committee do not desire to pursue in view of the Government's replies: Serial No. 23 Total: 01 Chapter-III (iii) Observations/Recommendations in respect of which replies of the Government have not been accepted by the Committee: Serial Nos. 5, 11 and 15 Total: 03 Chapter-IV (iv) Observations/Recommendations in respect of which final replies of the Government are still awaited: Serial Nos. 7, 17 and 19 Total: 03 Chapter-V 3. The Committee trust that utmost importance would be given to implementation of the Observations/Recommendations accepted by the Government. In case, where it is not possible for the Ministry to implement the recommendations in letter and spirit for any reason, the matter should be reported to the Committee with reasons for non-implementation. The Committee desire that final Action Taken Replies on the Observations/Recommendations contained in Chapters- I & V of this Report be furnished to them at an early date. 4. The Committee will now deal with the Action Taken by the Government on some of their observations/recommendations made in the Ninth Report. PLAN EXPENDITURE — PROMOTION OF R&D IN IRON & STEEL SECTOR Recommendation (Serial No. 1) 5. The Scheme for Promotion of R&D in Iron and Steel Sector was included in the 11th Five Year Plan with an outlay of Rs. 118 crore. The objective of the scheme was to promote and accelerate R&D activities in development of innovative/path breaking technologies utilizing Indian iron ore fines and non-coking coal, improvement of quality of steel produced through induction furnace route and beneficiation of raw materials like iron ore, coal etc. and agglomeration (e.g. pelletization). The Scheme was approved on 23.01.2009 for implementation from Financial Year 2009-10 (w.e.f. 01.04.2009). At the end of the 4th year of the 11th Plan, only about 25% of the funds could be utilized and none of the 8 schemes taken were completed. As of now, out of 8 approved R&D projects, 5 projects have been completed and funds had already been released. In the 12th Five Year Plan, a provision of Rs. 200.00 crore had been made for the R&D Scheme. In BE 2015-16, against the total outlays of Rs. 15.00 crore, a provision of Rs. 1.00 crore had been made for Development of technology for Cold Rolled Grain Oriented (CRGO) Steel Sheets and other value added innovative steel products (new component); and Rs. 14.00 crore for Development of Innovative Iron/Steel making Process/Technology (new projects under the existing R&D scheme). While examining the year-wise allocation and amount released under the scheme, the Committee found that during 2014-15, there was underutilization of funds under the Scheme as only Rs. 2.03 crore 2 were utilized (upto December, 2014) against the BE of Rs. 20 crore and RE of Rs. 7 crore. The Committee also noted that during first three years of the 12th Plan, there is huge reduction in allocation for R&D scheme at RE stage. The Committee felt that an assessment should be made whether the objectives of the schemes were being achieved especially in the area of improvement of quality of steel and beneficiation of raw materials. The Committee had also been given to understand that a few R&D proposals for development of innovative iron/steel making process/ technology, received in response to the Ministry's earlier endeavour, were under consideration of the Project Approval & Monitoring Committee. The Committee desired that the Project Approval & Monitoring Committee should look into the merits of the proposals received, expedite the matter and apprise them of the new R&D schemes taken with the budgetary support of Rs. 15 crore during 2015-16. 6. The Ministry of Steel in their Action Taken Replies have informed the Committee as under:— "As per the Department of Expenditure's guidelines, an independent evaluation of the R&D scheme was carried out by Indian Institute of Public Administration (IIPA) New Delhi, in 2012-13. IIPA has concluded that R&D projects pursued under the scheme adhere to the objectives of the scheme and are highly relevant, and need to be continued in the 12th Plan. With regard to the new R&D projects to be pursued in 2015-16, it may be noted that one R&D project with Plan Fund allocation of Rs.