Working Capital Practices in Manufacturing Industries

Abstract

India presently is going through an economic up-turn and at this particular time in the nation’s development, considerable attention is being paid to the creation of adequate infrastructure to meet the country’s development needs. Industry is also experiencing robust growth in several sectors and India’s agricultural sector has continued to show growth with improved productivity and product quality. It can therefore be assumed that if these trends continue India will continue to enjoy healthy economic growth for some years to come. The demand for steel in India therefore should continue to raise, both in construction steel and in flat products used in the automotive and consumer product sectors. India also has a specific advantage in that its iron-ore and related mineral-resources are plentiful, which will provide the Indian steel industry with a particular global advantage. Steel consumption in India has grown at a steady rate of about 5-6% over the last decade, to a level of about 28 million tones per annum. This growth rate is likely to accelerate, with consistent and rapid growth in the Indian economy. The present steel consumption per capita per annum is about 30kg in India, compared to 150kg in the world, and 350kg in the developed world. The estimated urban consumption per capita per annum is around 77kg in the country, expected reach approximately 165kg in 2019-20. Apart from the anticipated growth in the construction, automobile, oil and gas transportation, and infrastructure sectors of the economy, conscious promotion of steel usage among architects, engineers and students by the Institute of Steel Development and Growth and the large producers will drive this additional consumption. SAIL is currently operating in such a phase where the demand of its products is heading only one way. Steel industry is set for growth and present producers are all planning to increase their production capacity. So SAIL has to gear up for the upturn and enhanced competition.