New Depb Rates For Steel Exports In April

Finance ministry considering more concessions for producers

The Centre will announce new improved duty entitlement passbook (DEPB) rates for exports of steel products in April, steel secretary A K Basu said here yesterday.

The existing DEPB rates were not good, Basu said while speaking at steel seminar 1998 here, adding that the steel ministry had discussions with the ministries of commerce and finance in this regard. He said the proposal for raising the rates had been accepted by the two ministries and committee of secretaries.

Saying that major steel producers were carrying huge inventories due to lack of domestic demand, Basu said that steps would have to be taken to boost exports. He said that during 1998, export of iron and steel would touch nearly three million tonne. The ministry was taking steps to form steel exporters forum within 15 days. This forum would comprise major exporters like SAIL, Tata Steel, Essar Steel and Llyods Steel.

 

The forum, which would also have a government representative, would suggest ways and means to increase steel exports.

Dealing with the issue of dumping HR coils in the Indian market, Basu said the steel ministry had gathered enough evidence, which had been furnished to the commerce ministry and the latter would soon initiate proceedings against the exporting countries. However, he said that this was time-consuming as it involved a quasi-judicial process.

On increasing the flow of credit to the steel sector, the secretary said that though there was no need to declare steel as an infrastructure industry, the government could grant concessions similar to those extended to the latter. Thus, a steel producer could go for external commercial borrowings without any end-use restrictions. Further, the producers could also be given tax holidays. According to him, these issues were being deliberated upon with the finance ministry which was looking into it.

Basu also said that financial institutions, which largely funded steel companies in the form of loans, were also keen to take part in equity on a selective basis. The steel secretary urged the producers to devise agressive marketing strategies, so that consumption of steel could be promoted in rural areas. On project delays, he said these led to cost-overruns which were a drain on the countrys forex earnings.

On the incidence of indirect taxes on the steel industry, he said that during the current year, there would be no reduction in customs duties except for raw materials not available within the country.

On lowering excise duties on steel products, he said the economic research unit of joint plant committee and several steel experts were on the job, and would suggest ways of lowering excise rates without affecting government revenue.

Tata Steel managing director J J Irani said the current recession in the steel industry was a result of general slowdown of the economy. Demanding that the steel industry be given a level playing field, he said the industry did not want any subsidy. At the same time, he said that tariffs in steel imports had already touched the levels recommended by the Raja Chelliah committee.

He, however, maintained that he was not suggesting any increase in tariffs on steel imports. Irani also advocated a steady flow of credit to the steel industry. On the poor consumption of steel, he said that one of the major reasons for this was low government investments in infrastructure.