Finance Minister Arun Jaitley will be presenting Budget 2018 in Parliament on February 1. While there are several expectations of key announcements for the economy and its various sectors, it remains to be soon whom the finance minister would oblige this time.
Here is a snapshot of the Budget 2018 Expectations of Rita Singh, chairman & managing director of Mesco Steel, on key issues:
1. Reduction of import duty on Coking Coal
a. Currently import duty on Coking Coal is 2.5% and many of the steel companies are dependent upon imported coking coal as the domestic quality is not suitable for the steel industry, due to higher ash content.
b. The import duty to be levied should be NIL as this would in turn help the steel industry to reduce the raw material cost and would increase production
c. During FY18 (April – September), 22.6 MT of coking coal was imported. India’s coking coal imports have increased by 9.9% y-o-y basis
d. The removal of import duty would help in reducing the cost of producing the end product and would help to increase the profitability of steel companies, which would in turn benefit the industry as well as economy as a whole
2. Indian steel companies are also requesting for exemption from Environmental Cess.
3. Removal of import duty on stainless steel scrap:
For the manufacturing of stainless steel in electric furnace, stainless steel scrap is the key raw material. This scrap is not available in India and has to be imported and hence Customs duty on import of scrap may be reduced to NIL from current duty of 2.5%.
4. Boost in Infrastructure development
a. The domestic consumption of steel per capita is around 65 kg only compared to global average, which is 235kg, which indicates a huge gap in per capita consumption in India.
b. India being the 3rd largest steel producer in India need to match up global standard and need to improve its per capita domestic consumption through investment in various infrastructure projects in semi–urban and rural areas.
c. Initiatives like “Make in India” is expected to boost the investment in infrastructure and thereby on demand for domestic steel would also increase.
d. Where the Steel Ministry is estimating to increase the per capita steel consumption to the level of 160 kg by 2030 from the existing level, initiatives should be created to increase the domestic consumption by investment more in smart cities, affordable housing, overall infrastructure development of the country which would indirectly not only help Steel industry, but also many other industry such as cement, automobiles, housing etc. industry also.
5. Reduction in export duty on Iron Ore upto 62% Fe (Ferrous Content)
a. At present there is no export duty on Iron ore with 58% Fe (ferrous content), we suggest to reduce the export duty on 62% Fe.
b. If this initiative is taken it would help the overall industry and exports from the industry would increase
The author is CMD of Mesco Steel