The Hindu Business Line : Panel for further cut in steel import duty to 10% — Calls for measures to meet small units' needs

THE Parliamentary Standing Committee on Industry has recommended a further cut in import duty on steel from the existing 20 per cent to 10 per cent and urged the Ministry of Steel to put in place a "triggered price mechanism" as a short-term measure to overcome the present crisis situation.

Steel consumers have been crying hoarse over rising prices for the past several months. They have been demanding a duty cut following which the import duty was reduced from 25 per cent to 20 per cent in the `Mini-Budget' last month and the four per cent SAD (special additional duty) was scrapped.

The Standing Committee report was tabled in the Lok Sabha on Wednesday.

The committee, which examined the non-availability of steel to the small-scale units in the country, has called for "a set of measures to make steel available to small-scale sector and thus prevent the danger of closure of hundreds of units depending on steel raw materials." It has been recommended that even though the Government has dispensed with the price control mechanism in this era of liberalisation, it should take note of the severe crisis situation that prevails in the SSI sector and step in with adequate alternative measures to ensure the availability of raw materials.

It has also proposed that a penalty clause be introduced for belated supplies to protect the interest of the small units.

The report also recommends withdrawal of the levy of excise duty on railway freight/stockyard expenses on transportation of iron and steel from plants to stockyards for the integrated steel producers as well as strengthening of the State small-scale industries corporations who provide an annual estimate of the steel requirements of the SSI units in their respective States.

Corsma's accusation

While the committee has urged the Steel Ministry to take care of the SSI sector's requirements, the Cold Rolled Steel Manufacturers Association of India (Corsma) has shot off a letter to the Ministry accusing it of going back on the commitments made to the steel users at the National Consumers Council (NCC) meeting held in August 2003.

In the meeting, it was decided that in case of any increase in prices after August 2003 by the integrated manufacturers, the Steel Ministry would take up the matter with the Finance Ministry for immediate reduction of customs duty on import of hot rolled steel.

Now that steel prices have been hiked four times since then, Corsma has charged the Ministry of inaction and urged it to step in and act in keeping with the assurances in the past.

"It is the fourth arbitrary and monopolistic hike in HR coil prices since the meeting without any action on the part of the Government. We trust that the Government shall now take immediate action in the matter for reduction in customs duty on HR coils to five per cent and to curb cartelisation and monopolistic pricing in overall national interest," it said.

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