Industry & Economy
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Steel
Steel sector sees silver lining
Our Bureau
KOLKATA, Feb. 28
ALTHOUGH the steel sector has not been given any direct fiscal relief in this year's Budget, it is happy with the thought that Mr Jaswant Sinha's maiden budget is likely to give the steel sector a boost via higher demand.
Mr V. Gujral, Vice-Chairman of Jindal Steel & Power Ltd, said the sops retained for the housing sector and the infrastructure sector projects — entailing an investment of Rs 60,000 crore — would boost steel consumption, especially of long products as bars and rods which are used in the construction sector.
The lowering of customs duty on power equipment and the liberalisation of the mega power projects too would boost steel consumption.
Flat steel consumption, which finds use in automobile manufacturing, air conditioners and other consumer goods, was also expected to go up due to the tax reliefs provided to the auto sector and some white goods items, he said.
However, the steel sector remained disappointed on its expectations on excise duty relief on steel, even as it was kept fretting about the reduction in peak customs duty rate on many items including steel.
A Steel Ministry official, however, felt that the reduction on import duty should not lead to any significant spurt in imports for the simple reason that the rate on hot rolled coils — one of the most sought after items by the importers — has been left untouched at 25 per cent.
He said between April and December 2002, steel imports at 1.1 million tonnes was 16 per cent higher than that of the same period in 2001 and the import of hot rolled coils (HRC) which finds application in many products was bothering steel manufacturers the most. Items as galvanised plates and sheets, which see a lower rate, is not imported much, he noted.
Along with the proposed investment in the infrastructure sector steel consumption will also get a boost due to the incentives announced for private hospitals especially the one regarding increase in the respect of depreciation rates on medical equipment which is expected to boost steel consumption.
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