Deadlock on steel export duty continues

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New Delhi, May 23: The steel ministry on Friday reiterated that it was in talks with the finance ministry to roll back export duties, however, the finance ministry maintains it has received no such proposal.

“We are in talks with the finance minister to see if duty on steel can be taken back,” steel minister Ram Vilas Paswan said here on Friday. Finance minister P Chidambaram said the finance ministry had not received any formal proposal from the steel ministry on a rollback on export cess. Paswan, however, did not comment on the different views presented by both the ministries.

Steel industry representatives had met Prime Minister Manmohan Singh recently and announced price cuts to keep the export cess at bay. The industry had put forward a list of 13 proposals to combat high input prices and not notifying the export cess was one of the demands. The revenue department, however, on May 10 went ahead and notified the cess. The steel industry now wants a rollback of the duties.

Paswan said the decision to roll back the cess was not in his ministry’s hand and, “finance minister will have to take the final decisions on the suggestions we have given.”

He added that the finance secretary and steel secretary were in touch regarding the matter and the cabinet secretary at the PMO level was looking into it.

Addressing the media on the UPA governments completion of four years and the performance of the steel sector, Paswan said the country was likely to see an investment of Rs 8,70,640 crore by 2020 and capacities of over 290 million tonne (mt) by 2019-20.

“The likely capacity achievable by 2019-20 will be over 290 million tons. Going by estimate of Rs 4,000 crore investment per million tonne of additional capacity, the sector is likely to see an investment of Rs 2, 76,880 crore by 2012 and Rs 8,70,640 crore by 2020,” the minister said.

Crude steel production grew at 10% annually from 34.71 mt in 2002-03 to 53.90 mt in 2007-08.