Patnaik told newspersons that he had particularly pleaded for lowering of the high interests rates charged by banks and financial institutions. Institutional lenders at present charge 18 per cent interest for project finances.

The steel industry demand for a package of fiscal sops, including excise and customs duty concessions, comes at a time when steel company profits are on the slide. Most steel-makers, including industry giant, the Steel Authority of India Limited (SAIL) reported losses in the first quarter of this year.

The steel ministry suggested that where ever overseas funding was not available for ongoing steel projects, domestic financial institutions should be willing to lend. Of late, financial institutions have balked at funding greenfieldsteel-making ventures, in the light of the industry-wide recession and the huge glut in the steel market.

Steel secretary Ashok Basu, clarified that financial institutions had only decided to withhold funds from flat steel projects, but were still willing to offer loans for `long' steel ventures. A sudden spurt in flat steel capacity in the last six years has created a tremendous over-supply of that grade of steel.

Long products, used mostly for construction work, however, still seems to be in demand. The steel delegation came away with hope, but without commitments from the finance minister.

Apart from the steel minister and the steel secretary, the team comprised chief executives of 11 mega steel companies. The Steel Authority of India was represented by its director, finance, V. S. Jain and Tata Steel was represented by its managing director Jamshed J. Irani.

Also present at the hour-long brainstorming on the morale-boosting package for the steel industry, were Rashtriya Ispat Nigam Limited (RINL)chairman and managing director B. N. Singh, Essar Steel chairman S. N. Ruia, Ispat Industries joint managing director V. K. Mittal, Mukand Limited chairman Rajesh Shah, Jindal Vijaynagar Steel Limited managing director Sajjan Jindal and Usha India managing director Anil Rai.

Patnaik explained that the interface with the steel ministry was part of the finance minister's exercise to evolve ``special packages for specific sectors.'' Friday's meeting, however, was the steel minister's third tete-a-tete with Cabinet colleagues, on the plight of the steel industry.

The steel ministry had led a similar delegation to commerce minister Ramakrishna Hegde, which yielded better sops for steel exporters and a lower dumping duty on metallurgical coke (a steel-making input.) Steel ministry brass, led by Patnaik have also met power minister R. Kumaramangalam and sought a list of pending power projects.

The list will give steel companies a notion of the emerging demand for the alloy, Patnaik said, explaining that steelcomprised nearly 40 per cent of a power plant. At the meeting with the finance minister too, the steel ministry sought a package for boosting the demand for steel.

The finance minister reminded the delegation that a taskforce would be given the responsibility of clearing infrastructure projects post haste. He also assured the team that he would consider a mechanism for creating foolproof anti-dumping checks.

The steel delegation suggested a trigger price mechanism to ward off an inflow of cheap steel into the country, which results in unfair competition for the domestic industry. To help bring down the cost of making steel at home, the steel ministry suggested an exemption from the special additional import duty (SAD) for vital steel making inputs.

Basu pointed out that coupled with the five per cent special import duty still in vogue, the four per cent SAD effectively increased the levy on steel-making raw materials to nine per cent. The ministry pleaded for a waiver of SAD particularly for cokingcoal, non-coking coal with less than 12 per cent ash, ferro nickel, charged nickel and steel melting scrap.

The steel ministry also proposed a ``revenue neutral'' solution to boosting investor confidence. It suggested that the 15 per cent excise duty on finished steel be reduced for grades that do not get MODVAT advantages. The resulting Rs 400 crore of revenue loss to the national exchequer, the ministry felt, would be hugely compensated by the higher production of the construction grades of steel, which make up nearly 30 per cent of the industry output.

The industry annually contributes Rs 5300 crore to the national exchequer in the form of excise, which is higher than the collection from cigarettes and man-made textiles.