Hypothesis Research was done by use of secondary data only.

Secondary data was extensively used to determine the performance of Indian Steel industry and its relationship with the Indian economy, where secondary data was utilized to infer interesting insights on the potential growth of Indian Steel industries.

The analysis revealed that: The Indian Steel Industry is directly affected by factors of the Indian economy such as Gross Domestic Product, Per capita Income, population and so on.

Thus my hypothesis was correct as it has been proved that due to the present boom in the India economy, the Indian Steel industry has benefited in a lot of ways. The direct relationship of the Indian economy with the Indian Steel industry cannot be over looked and with India still to explore its full potential, the Indian Steel industry can be safely assumed to be reaching out for a golden era in steel production and domination. Data Analysis Table 1, Graph 1 Table 1 exhibits the world production of Steel from 1970 to 2008. the over all world steel production has been growing at more than 6% year on year from 2001 onwards, except for 2008, when the world was facing a global meltdown. It is expected that the world steel production will once again become strong by 2010.

Table 2, Graph 2

Table 2 displays the Major Steel producing countries of the Steel for 2008. China has been dominating as the biggest steel producer followed by Japan, US, Russia and so on. India has leaped as the 5th largest producer of steel in the world and is expected to rise further up in the coming years.

Table 3, Graph 3 Table 3 shows the Indian Steel Production from 2002 to 2008. From 28814 mmt tonnes in 2002, the Indian steel production has almost doubled to 55050 mmt in a span6 years. This can be attributed to the growing domestic steel demand and a robust Indian economy.

Table 4, Graph 4

Table 4 shows the sector wise steel production in India. It can be observed that the percentage production of the public sector has been increasing continuously. With the government focusing on expansion plans for the public steel producers, the percentage share of their steel production is bound to increase further. Table 5, Graph 5 Table 5 exhibits, the total export of Steel and pig iron from India. The exports has been growing expect for the last two years. 2008 has seen a slow down in the over production and demand for steel, hence the exports also dried up to some extent.

Table 6, Graph 6 Table 6 displays the total Import of Steel to India. India has been increasing importing more steel over the years to meet its increasing domestic demand of steel. Since Indias total production is not sufficient to meet its domestic demand, India will continue to import steel over the next few years.

Table 7 Table 7 shows the major company wise production of steel for 2008. After, the merger of Arcelor with Mittal, Arcelor-Mittal has become the largest producers of steel in 2008 producing 103.3mmt of steel. Tata Steel is ranked 7th with 24.4mmt production of steel.

Correlation and regression analysis:(annexure- table 8& 9) In statistics, correlation (often measured as a correlation coefficient, ) indicates the strength and direction of a relationship between two random variables. Correlation is used to determine the extent to which changes in the value of an attribute (such as length of employment) are associated with changes in another attribute (such as salary). The correlation between two variables reflects the degree to which the variables are related. The most common measure of correlation is the Pearson Product Moment Correlation (called Pearson's correlation for short). When measured in a population the Pearson Product Moment correlation is designated by the Greek letter rho (). When computed in a sample, it is designated by the letter "r" and is sometimes called "Pearson's r." Pearson's correlation reflects the degree of linear relationship between two variables. It ranges from +1 to -1. A correlation of +1 means that there is a perfect positive linear relationship between variables.

In the first step, I would analyze the effect which the macro economic indicators have on the production of Steel in India. The macro economic indicators considered for this analysis are; GDP at Factor Cost, Population, Per Capita Income and Export. In the second step I will be using the above mentioned macro economic Indicators to analyze there impact on the domestic sales of steel in India.

TABLE-8 ANALYSIS: From the results generated in Table 8 it can be interpreted that Population growth of the country has the greatest impact on the production of the Steel in India. The per capita Income has the second strongest relation with the production of Steel in India. With increase in the population of the country not only the market for Steel is growing but also the cheap skilled labour base is expanding, one of the main reasons why Indian Steel sector is facing a boom in the last few year. Also, with the Indian economy getting stronger year on year, the disposable income in the hands of the citizens is increasing, due to which the demand for Steel is also facing an increased demand. With booming economy and higher disposable income the demand for more and better infrastructure is growing

exponentially, this directly affects the demand of Steel.

TABLE -9 ANALYSIS: From the results generated in table 9 it can be observed that the relationship between Domestic Steel Consumption in India and macro economic factors, is strongest explained by Population and seconded by Per capita Income. The results are similar to the test 1 and are based on the similar grounds of explanation as expressed in the analysis of Test 1. But one another important factor to be kept in mind is that Per capita Income in many ways is a factor of the Real GDP growth. As the GDP of an economy expands the Per Capita Income of the country is bound to increase year on year. The tests ultimately lays all emphasis on the one thing that has been said over and over again, which is which the Indian Economy going through a boom, the need for steel is going to face an increase of many folds in the near future. Steel Industry is all set to become the back bone of our economic growth. Table 8 Data Used for correlation Analysis

Macro Economic Indicators GDP at Factor Cost (% change) Population (in millions) Population (% change) Per Capital Income Per Capital Income (% change) Export (in million) Export (% change) 2003 8.5 1,075 1.86 18885 20,895 10.64 48318.5 56,977 17.92 2002 4.0 1055.4 2004 7.3 1,102 2.54 23,199 11.03 75,405 32.34 2005 2006 2007 2008 9.0 9.2 9.3 6.7 1,134 1,152 1,169 1,186 2.91 1.53 1.5 1.46 25,956 29,642 33,299 35,654 11.88 14.2 12.34 7.07 96,230 121,007 147,034 182,648 27.62 25.75 21.51 24.22

Steel Industry india India Category Domestic Consumption (In million Tonnes) units Growt h units Growt (% h ) Production (In million Tonnes) (% ) 2002 30.67 7 28.81 4 2003 33.11 9 7.96 31.77 9 10.29 2004 36.37 7 9.84 32.62 6 2.67 2005 41.433 13.90 45.780 40.32 2006 46.783 12.91 49.450 8.02 2007 2008 49.823 51.21 2 6.50 2.79 53.080 55.05 7.34 0 3.71

Correlation Analysis between Production of Steel and various macroeconomic factors

Real GDP (% change) Production

Real GDP (% change) 1 0.514424596

Production 1

Population (in millions) Production

Population (in millions) 1 0.979097164

Production 1

Per Capital Income Production

Per Capital Income 1 0.966730213

Production 1

Export (in million) Production

Export (in million) 1 0.948459947

Production 1

Table 9

Correlation Analysis between Domestic Consumption of Steel and various macro economic factors

Real GDP (% change) Consumption

Real GDP (% change) 1 0.49644775

Consumption 1

Population (in millions) Consumption

Population (in millions) 1 0.992028865

Consumption 1

Per Capital Income Consumption

Per Capital Income 1 0.990534396

Consumption 1

Export (in million) Consumption

Export (in million) 1 0.97152296

Consumption 1

Annexure
Table 1 World Steel Production 1970 to 2008
World Steel Production 1970 to 200836 Years 1970 1975 1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 World (In million Tons) 595 644 717 719 770 752 750 799 777 789 848 850 904 970 1069 1147 1251 1351 1327 Avg. growth per annum 8.24 11.34 0.28 7.09 -2.34 -0.27 6.53 -2.75 1.54 7.48 0.24 6.35 7.30 10.21 7.30 9.07 7.99 -1.78

Table 2 Major Country wise Steel Production in 2008

Countries China Japan United States Russia India South Korea Germany Ukraine Brazil Italy Turkey Taiwan, China Spain France Mexico Canada United Kingdom Belgium

2008 (In million metric tons) 500.5 118.7 91.4 68.5 55.2 53.6 45.8 37.1 33.7 30.6 26.8 19.9 18.6 17.9 17.2 14.8 13.5 10.7

Graph2

Table 3 Indian Steel Production from 2002 to 2008 (In mmt)

2002

2003

2004

2005

2006

2007

2008

India 28,814 31,779 32,626 45,780 49,450 53,080 55,050

Graph 3

Table 4 Table 4 Sector-wise Steel Production In India37

Particulars Private Sector Public Sector Graph4

2004 15.91 27.52

2005 16.96 29.49

2006 17.003 33.81

2007 17.09 36.76

(In mmt) 2008 16.37 38.14

Table 5

Export of Steel and Pig Iron from India

Exports (In '000 tonnes) Steel Pig Iron 2004 4642 393 2005 4866.1 440.1 2006 5557.8 706.7 2007 5000 450 2008 4036 261

Graph 5

Table 6

Import of Steel to India

Imports (In '000 tonnes) Total Graph 6 2004 4862.8 2005 8790.2 2006 8045.3 2007 10648.7 2008 9914