TANMOY CHAKRABORTY, Jindal Steel & Power Limited, New Delhi
India’s ambitious target of 300 million tonnes of steel production by 2025 gives us an optimistic insight into the economy’s development curve and makes us proud that such an achievement will take the country’s industrial sector to new heights. Indeed, increasing crude steel production is one of the essential parameters for our economic growth.
India has achieved well in the steel sector. From a meager 2 million tonnes production post- independence to 91 million tonnes in 2016 is a growth well lauded. But with aspirations come several challenges, one of which is getting required skilled manpower for the steel sector.
New Steel Policy
The beleaguered USD 100 billion industry is struggling hard to reach a sustainable level. Steel industry, today is one of the largest contributors to Non Performing Assets (NPAs) in India. Hence, aiming for a growth of 14% pa to reach 300 million tonnes by 2025 needs a very sound policy. With fluctuation in coking coal prices and unavailability of indigenous coal for use in steelmaking, raw material security is another major point of focus. Financial aspect, ie funding for new projects, expansion of existing units and flexible financial instruments should be incorporated in the policy. But, as a steel insider, I feel, one of the major areas that the new policy should focus is on building and retaining skilled workforce. In an era of digitization and automation, more and more graduates are opting for jobs in non- manufacturing sectors. If this outflow continues it can jeopardize our aim of producing 300 million tonnes of steel.
The Skill Crisis
With organizations facing tough competition globally, labor productivity has become a critical factor in any business organization. Organizations want right skills in their entire value chain. Hence, it is the right time that we be aware of the growing requirement for a variety of skills. Questions like how fresh graduates can be inspired to choose steel industry jobs and how should steel producers attract young talent, should be answered.
Training modules, importance of R&D, compensation packages and career plans must be brought on to the table. Under the Ministry of Skill Development & Entrepreneurship, several initiatives have been taken to impart training but with 17 other ministries involved in various skill development program, the result is far below the national target of imparting training to 350 million by 2022. Recently, a lot of ground work was done by the ministry but sustaining such activities is essential.
As per reports published by Ms Mecon and Indian Institute of Technology, there are few points which are worth pondering upon for the steel sector. Few of them are reproduced below.
— An yearly attrition of 3% until 2020 is assumed to take place in the steel sector
— The technical manpower requirement shall be around 0.15 million (average)
— The study predicted that by 2020, support sector organizations, sponge iron units and pig iron plants shall require technical manpower to the tune of 5164, 35467 and 4590 respectively; approximately 152,147 of ITI trained personnel shall be required to run & produce 300 million tonnes of steel Implications
— The requirement each of graduate and diploma engineers will be close to 8,000
— 5-6% of entire workforce will be engaged in R&D activities
— Mecon has estimated that to produce 300 million tonnes of crude steel, there will be requirement of 315,000 people for direct employment and 1,262,000 for indirect employment.
The above points are just a few areas which require consideration. Going by the present trend and linear extrapolation, the talent and skill gaps across the entire value chain will keep widening unless addressed. We must now start benchmarking ourselves with the global best. Skilled employees should be regarded as capital investments..
All the factors described above will need to be supported by a strong financial mechanism. I think both government & private players have a decisive role to play to attract and retain talent in the steel sector. The current ratio of technical manpower requirement per 1000 tonnes of steel should increase. Engineering students should be encouraged to take up internships in steel units. Steel plants should also collaborate with engineering institutes. Institutes too should add internship with steel units in their curriculum. Eminent government bodies under the aegis of Ministry of Steel like NISST may be allowed to conduct classes on steelmaking in few identified institutes. Investment in research & development cell must be encouraged and the money spent on R&D activities must have some tax exemption. Government must audit the R&D activities done by steel players to enhance efficiency in steel manufacturing.
Institution building in this sector needs an exponential leap. These will definitely add cost but both private and government institutions should address the fact that lack of skilled workforce could become a barrier in business expansion, which will eventually downgrade the economic growth projection. Government too, through adequate policy and necessary tax relaxation should support the steps taken by private bodies.
The gap is in the number rather than knowledge. Considering the quantum of young workforce, the government along with steel industries can easily cap the skill gap. Growth should be accompanied by creation of adequate number of jobs, availability of skilled workforce, if not, it will fail to give adequate social protection and hence it cannot be inclusive because it is only social cohesion that enables economic growth. It is also quite admirable that our prime minister is giving high impetus to skill development. A good beginning for us would be to regain our vigor to institution building in the steel sector and bridge the skill gap sooner.
* The views provided are author’s own and do not necessarily represent the view of the company.
Source: Steel 360 Magazine DEc’16 Issue