Remove import duty, clean energy cess on coking coal: ParPanel

A Parliamentary committee today suggested removal of 2.5 per cent duty on import of coking coal and scrapping of clean energy cess of Rs 400 a tonne, as these measures hinder competitiveness of domestic steel firms.
Standing Committee on Coal and Steel, chaired by Rakesh Singh, pointed out that expenditure by Indian steel companies on research and development (R&D) remained a dismal 0.05-0.5 per cent of their sales turnover, which is lower compared to 1-2 per cent by those in China, Japan and South Korea.
The committee found that at the present rate of per KWH power in the country, domestic steel producers are at a disadvantage of Rs 800-900 per tonne as compared to steel producers in China, Japan and Korea.

Certain levies and duties in the form of District Mineral Fund (DMF), National Mineral Expansion Trust (NMET), duty on import of raw material such as coking coal (at 2.5 per cent), levy on clean energy cess etc, which are imposed on steel producers in India, it added.
Steel Ministry desired that duty on clean energy cess and on coking coal be removed as 90 per cent of coking coal is imported due to lack of domestic availability and it being cleaner source having lower ash content and essential input material for production of steel, the panel said.
The committee recommend that the Ministry should take up the matter at the "highest level with the authorities and also the states concerned and impress upon them for waiving off the import duty and clean energy cess on coking coal" as it being the major and cleaner raw material for production of steel.

On investments in R&&D, the panel said steel firms like SAIL, Tata Steel, JSW Steel and Essar Steel have accomplished some significant R&D works in the area of raw material beneficiation, agglomeration and product development.

"However, the actual investment on R&D by steel companies in India has remained very low in the range of 0.05-0.5 per cent of the sales turnover compared to R&D investments in steel companies abroad.
"For instance, in the countries like China, Japan and South Korea etc, annual R&D investments are very high and varies in the range of 1-2 per cent of their sales turnover," it added.

In comparison, during 2014-15 SAIL's expenditure on R&D was only 0.56 per cent of the turnover. Similarly, expenditure by RINL, NMDC, MOIL and MECON during 2014-15 was 0.28 per cent, 0.15 per cent, 0.73 per cent and 0.53 per cent, respectively of their total turnover, it said.
The committee observing that the utilisation of iron ore
fines leads to conservation of minerals and better economics of operation as well as avoiding long range transportation of fines for economic and environmental reasons.
Development of innovative and path breaking technologies for better utilisation of iron ore fines is the need of the hour, the panel stressed.

"The Committee desire the Steel Ministry to seriously pursue the various R&D projects sponsored by them and extend all possible assistance/guidance to encourage the Indian steel companies in their initiatives being taken in this direction," it suggested.
Dependence on imported raw materials, especially coking coal, has discouraged development of indigenous technologies compatible to resource endowment, the panel said.
It is also a threat to the sustainability of resources especially adequacy of iron ore resources as India is yet to develop cost effective beneficiation/pelletisation technologies suited to domestically produced iron ores, it added.
It recommended that there is an "urgent need" to speed up implementation of technologies developed by setting up pilot plants/Industrial trials, it said.

This should be for beneficiation and pelletisation of iron ore slimes, optimum coal blending, production of low phosphorous steel, quality steel through induction furnace route so that the country can become self reliant in utilising of raw material resources, it added.
The committee said "need of the hour" is to focus on exploring new avenues for steel utilisation that in turn would have a proportionate effect not only on increasing production, but consumption too.
R&D should not be restricted to technologies/innovation to increase production, but is required to focus and identify areas where consumption can be increased, it added.
The panel recommend that besides real estate and home/ industrial appliances, innovative techniques like steel usage in unutilised sectors such as construction of bridges by replacing concrete/cement with steel, road railings in hilly areas, etc. Should also be encouraged.