Paswan: Ready to act
New Delhi, April 10: The government is ready to take stringent steps, including the creation of an independent regulator, to curb rising steel prices.
It will also set up an internal committee to assess input costs and price movements, to detect profiteering.
If it is found that steel makers have increased prices more than the rise in input costs, necessary steps will be taken to contain the same, steel minister Ram Vilas Paswan said. He has also written to Prime Minister Manmohan Singh, suggesting measures to check prices.
The steel ministry has proposed reducing the duty on finished steel and zinc to zero. It also wants to reduce the countervailing duty on TMT bars, used in construction, and impose a 16 per cent export duty on finished steel.
These measures are expected to improve the availability of steel in the domestic market and force manufacturers to hold prices, which have increased 50 per cent this year.
The government is also considering a proposal to reduce the excise duty on semi-finished steel to help manufacturers who have been complaining of escalating input costs.
Paswan has also asked the Prime Minister to consider a regulator, which among other things, will routinely monitor steel prices.
The proposal to set up a regulator to monitor steel prices was very much on the table and measures would be initiated as and when felt necessary by the government, the minister said.
The committee of secretaries, which met last evening, is understood to have considered an array of measures to contain steel prices, which are contributing to inflationary pressures on the economy.
It has also favoured replacing the fixed export duty of Rs 300-a-tonne on high-grade iron ore and Rs 50-a-tonne for low-grade varieties with a single ad valorem duty of 15 per cent.
This move, which had long been demanded by steel makers, will curb the sale of iron ore abroad and force miners to sell larger quantities at home.
However, the Indian Steel Alliance (ISA), the umbrella body of leading steel companies, said the producers were averse to any confrontation with the government and suggested that steps were necessary to contain the inflationary trends in the economy.
Steel producers are not interested in any confrontation with the government. Inflation is a national crisis. Steel companies will have to come together to address the issue, said Moosa Raza, president of the ISA.