Govt`s price-control measures lose edge

RUPEE SLIDE-2

As on April 20
(Rs/tonne)

As on May 20
(Rs/tonne)

Fiscal move

Crude Palm Oil

50,375

50,480

45 % import  duty abolished in March

Newsprint

34,000

37,000

Import duty cut to 3 % from 5% (April 29)

Metallurgical
coke(FOBChina)

21,037

24,260

5 % import duty abolished (April 29)

 Crude palm oil (CPO), becoming cheaper in dollar terms, is now marginally costlier in rupee terms. This despite a cut in duty from 45 per cent to nil in March. The country meets 45 per cent of its edible oil requirement through imports.  The rupee has weakened 6.55 per cent against the dollar to Rs 42.60 since April 20. The Reserve Bank of India, which was on a dollar-buying spree for long to check the appreciation of the rupee, sold about $1.5 billion in March.  Finance Minister P Chidambaram had on April 29 announced scrapping of the 5 per cent duty on metallurgical coke, ferrous alloys and zinc, all of which are used to manufacture steel. Also, the duty on steel products was scrapped and house construction products like TMT bars and structurals were exempted from the 14 per cent countervailing duty.

 "Most gains arising out of the duty cut has been taken away by the rupee factor. At the same time, we are not in a position to cash in on the higher returns from exports since an export duty has been levied on steel," said an official with a steel company.