Industry & Economy
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Budget
Customs duty cut will bring down project costs
Mr B. Muthuraman, MD, TATA steel at a press conference in Bangalore on Wednesday. -- Pic G R N Somashekar
Mr B. Muthuraman, Managing Director, Tata Steel
The Budget has sought to address the needs of industry and at the same time has given high priority to development of the country. We are happy to see the focus on development of rural infrastructure such as rural roads, rural electricity, low-cost housing and drinking water as also on the focus on basic education and healthcare.
The targets being met on the deficit front reinforces the financial initiatives of the Government though the country continues to be fragile on fiscal balance. It would be important to continue the fiscal correction to improve India's international competitiveness. Reduction of peak rate of custom duty from 20 per cent to 15 per cent will help bring down the cost of new projects and will help the steel industry which is in the process of modernising and creating new capacities. Reduction of duties on inputs and consumables like refractory and coking coal will bring down costs.
Given the Government's focus to build infrastructure, it is important to promote investment in basic industries like steel and therefore classify them as infrastructure industry u/s 80 IA of Income Tax Act. It is unfortunate that Excise Duty on steel has gone up from 12 per cent to 16 per cent as this will impact small consumers who cannot take Cenvat benefit.
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