Ashwani opposes FM's price cut call

Written by Economy Bureau | New Delhi , Nov 19 | Updated: Nov 21 2008, 05:00am hrs
Corporate India is not alone in its sharp opposition to the UPA governments idea of spurring domestic demand via price cuts by industries like real estate, automobiles and airlines - the governments own seem to be in agreement with the industry. Minister of state for industry Ashwani Kumar ruled out the prospects of price cuts from industry, batting instead for increased public spending on infrastructure to boost the economy.

Emerging from a two-hour long meeting with over forty industrialists, Kumar said, The industry is not going to cut prices without considering the competitiveness and survival. My priority is to ensure survival of the industry and creation of employment. The spur in demand should come through huge public spending on infrastructure, he stressed.

On its part, the department of industrial policy and promotion is developing a fiscal stimulus package for micro, small and medium enterprises, which are dealing with lower demand and high cost of funds. I have given my department 15-days time to come up with preliminary understanding of the industrys recommendations and suggest what could be done about them... The government will come up with a fiscal package, including the duty structure, that is critical for the sector and boost further investment, the minister said.

The government is in the process of imposing stricter anti-dumping measures to prevent cheap imports of goods like chemicals and steel, particularly from China . There has been dumping of chemicals, steel, rubber etc into the country. There are goods coming in from China . We will see the strengthening of anti-dumping measures across the board, Kumar said.

Anti-dumping measures are imposed to bring the price of imported goods at par with that sold by domestic companies. According to the Directorate General of Anti-Dumping, anti-dumping laws were last amended with effect from January 1, 1995 to bring them in line with the provisions in WTO agreement.

According to industry estimates, Indian firms imported 2,25,000 tonne of steel during April-August, more than double the 1,04,000 tonne it imported a year ago.