Macro Economy

Excise duty cut on automobiles to spur steel demand

Our Bureau New Delhi | Updated on March 12, 2018 Published on February 17, 2014

Steel makers expect to benefit indirectly from Finance Minister P Chidambaram’s move to reduce duties on automobiles, capital goods and non-consumer durable items. They expect the move to spur demand, mainly for flat steel products.

“The interim Budget is positive for us owing to its thrust on growth which is good for the steel industry. The lowering of duties on capital goods and automobiles will help strengthening the demand for steel,” said CS Verma, Chairman of SAIL, the country’s largest steel maker.

“This continued thrust on development of infrastructure and manufacturing will help industrial growth in the long term,” Verma added.

Steel makers have been reeling under the impact of sluggish consumption trend in the past couple of years. Steel consumption in April-December of the current year has grown by a mere 0.5 per cent according to the Steel Ministry, while the production during the period was up 5.2 per cent at 60.4 million tonnes. Steel capacity in the country is estimated at 94 million tonnes.

“The proposal to reduce excise duty on automobiles in the current economic environment is a welcome step. However it would have been more meaningful and impactful if the excise duty on steel would have been reduced,” said Firdose Vandrevala, Executive Vice-Chairman, Essar Steel India.

“This would have had a positive and deeper influence on a wider section of Indian industry. Nonetheless, something is better than nothing!” he added.

Published on February 17, 2014
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