Steel sector to get boost from Chhattisgarh state budget

State govt announces tax sops to facilitate for industry to recover from current crises

Chhattisgarh Chief Minister Raman Singh on Saturday presented a Rs 44,169-crore Budget in the assembly for the next financial year, which offered several sops to the state’s struggling steel industry, besides promising to spend 22 per cent of the total Budget outlay on agriculture.

The Budget curtailed the entry tax on iron ore, pig iron and steel scrap purchased from outside the state from one to 0.5 per cent. The value-added tax on TMT steel bars was reduced from five to three per cent, while the entry tax on iron ore pellet cut from one to 0.5 per cent.

Besides, the government had also reduced the entry tax on furnace oil purchased from outside the state from 10 to five per cent. The sops announced by the government would bring respite to the steel industry that has been passing through its worst ever crisis with half of the units running underproduction.

“It’s not so that the increase in gross state domestic product (GSDP) or the sops had been aimed only for the industry, state annual budget for the fiscal 2013-14 is focused more on agriculture,” chief minister Singh said after presenting the Budget.

Besides an agriculture budget of Rs 8,542 crore, the government would distribute a bonus of Rs 1,900 crore to the farmers at the rate of Rs 270 per quintal of paddy it had procured. The government had procured 7 million tonnes of paddy in the kharif marketing season 2013.

“In all, Rs 10,500 crore would be spent on agriculture sector that accounts to about 22 per cent of state Budget outlay,” Singh said, adding that 3.7 million farmer families would be directly benefited. The increase in GSDP had not been a help for only 10 per cent population as 76 per cent population depended on agriculture would get the better share, he added.

The chief minister, who also holds the finance portfolio, said the average agriculture growth in Chhattisgarh had been more than 10 per cent in the last three years, compared to five per cent in the industry sector.

Steel makers have welcomed the sops. “The state government cannot do more than what it had done in the budget for the industry,” said Anil Nachrani, president of the Chhattisgarh Sponge Iron Manufacturers’ Association.

The state government did its job and now the Union government should also take some initiative that would literally give a new lease of life to the sinking steel industry, Nachrani said, adding that the Centre should announce to regulate availability of raw material for the local industry.