White paper to reduce tax on steel
The government will come out with a white paper in four months to cut taxes on steel companies and make them competitive, steel minister Dharmendra Pradhan said on Monday.
Pradhan said the Niti Aayog would prepare the report in consultations with various government departments, including the finance ministry.
“We (government) will come out with a white paper in three-four months. The steel ministry, respective ministries and government departments will be part of it,” he said at a national conference of the furnace industry here on Monday.
The white paper will focus on lowering taxes, cess and other duties on the industry, besides studying global models. Officials said the production cost of steel was the highest, with taxes playing a major role. Royalty is close to 20 per cent on inputs such as coal or iron ore. Freight cost is higher than in other countries even as electricity was expensive.
According to industry estimates, the cost of per tonne of steel in India is about $450, whereas it is $350 in China, mainly on account of lower taxes. Pradhan said the government was bringing changes to the Electricity Act which will address concerns related to power tariffs.
He said the industry need not worry about raw materials as a number of mines will would be auctioned after March 2020.
Pradhan also urged the industry to focus on new technologies. He said future policies would address the concerns of the secondary steel sector.
“We are making our policy framework more inclusive. Our government has made raw material even more accessible to the secondary steel sector. Industry must reciprocate by producing more value added products.”
“India still imports high quality steel and we have a large market with skilled workforce. We must create an ecosystem to develop more high quality steel in the country and move towards becoming a net exporter,” he added.
Pradhan stressed the importance of MSMEs in the economy. Economies of scale has its own benefits but large industries alone cannot cater to the huge population in terms of jobs creation.
“Our MSMEs play an important role in large scale employment creation. The nation cannot prosper without wealth creators. Guided by the mantra of “Minimum Government, Maximum Governance” we are committed to facilitate growth of wealth creators,” he added.
“India still imports high quality steel and we have a large market with skilled workforce. We must create an ecosystem to develop more high quality steel in the country and move towards becoming a net exporter,” he added