"No direct increase in freight is good news for the steel industry, because for every tonne of steel, around 4 tonnes of material is transported, including raw materials and finished goods. Substantial increase in raw material prices over the last few months has already put pressure on the margins of steel companies. 

Therefore no direct freight hike comes as a much-needed breather. SAIL is an active partner in the growth of the Railways in the true sense, since the company’s share in total rail freight revenue is around 8%.

"In addition, laying of new and modified rail lines, procurement of wagons and related investments in infrastructure are all positive steps with reference to the steel industry. 

We welcome the well-defined long-term targets announced in the Rail Budget such as laying of 25,000 kms of new rail lines in the next 10 years, including plans to complete 1,000 kms of new lines during FY''12. Besides, the decision to set up 5 state-of-the-art wagon factories in JV/PPP mode will go a long way in adding to transport infrastructure of the country."

The Author is C.S. Verma, Chairman, SAIL