Macro Economy

Duty cut on auto sector to boost steel demand

Our Bureau Mumbai | Updated on March 12, 2018 Published on February 18, 2014

The steel industry feels that the government move to cut excise duty on automobiles will spur steel demand. It, however, also believes that a transparent policy to grant environment clearance would attract more investment and ultimately increase steel demand.

TV Narendran, Managing Director, Tata Steel, said the government’s move to provide relief to the struggling manufacturing sector augurs well for the steel industry. However, it needs to be noted that the industry’s problems are more structural in nature.

While the Finance Minister has highlighted the role played by the Cabinet Committee on Investment in clearing stuck projects, there is an urgent need for a comprehensive review of the entire mechanism for grant of clearances (such as the environmental and forest clearances) to industrial projects in the country, he said.

“In order to spark an industrial revival, the government needs to implement a time-bound, simple mechanism that is fair to all stakeholders, and encourages economic activity in the country,” he said.

Steel demand in the country has fallen sharply in the last few months due to delay in implementation of various infrastructure projects. The prevailing economic slowdown has taken a toll on steel demand from the housing and automobile sector.

Firdose Vandrevala, Executive Vice-Chairman, Essar Steel India, said it would have been more meaningful if the excise duty on steel had been reduced. This would have had a positive and deeper influence on a wider section of Indian Industry, he said.

Terming the boost to manufacturing sector a temporary intervention, Subhrakant Panda, Managing Director, Indian Metals & Ferro Alloys, said a lot more needed to be done to bring the economy firmly back on the growth path but that would be the preserve of the new government and a full budget.

Published on February 18, 2014
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