Companies

Extend corporate tax cut to brownfield projects too: JSPL MD

Our Bureau New Delhi | Updated on April 18, 2021

Jindal Steel and Power Ltd Managing Director VR Sharma

As no new investment has come recently, says VR Sharma

In the absence of new investments, brownfield projects of the domestic steel industry must be given the central government’s corporate tax rate cut, Jindal Steel and Power Ltd (JSPL) Managing Director VR Sharma said.

“We are requesting the central government to extend tax cuts to brownfield projects,” Sharma said at a webinar by CARE Ratings on Friday. “Steel plants take two to five years to commence production. JSPL, JSW, SAIL, ArcelorMittal, and others have brownfield projects, but no new investment has been made recently.”

On Thursday, the World Steel Association (WSA) in its short-range outlook said that Indian steel demand is expected to rebound by 19.8 per cent in 2021, the sharpest rise among major consuming countries. “India will need 300 million tonnes of steel by 2030. Our production capacity presently is 100 million tonnes,” Sharma said.

Increased government spending on infrastructure as part of Covid-19 recovery push is boosting steel demand in India and around the world, he added. “This eruption of potential has come through government spending and not through personal and public spending.”

Steel prices have also risen sharply over the past few months, adding the pressure on consumer industries such as real estate and automobiles. However, domestic steel prices are at least $200 a tonne lower than the export price, Sharma said.

For the first eleven months of the just-concluded financial year, finished steel exports rose 22 per cent on a year-on-year basis to 9.5 million tonnes. On the other hand, imports fell 9 per cent to 4.3 million tonnes, according to data from the Steel Ministry’s Joint Plant Committee.

Published on April 17, 2021

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