New Delhi: Anxious to control rising prices, the government on 11 April warned the steel industry against profiteering and said it could determine the prices of metal by putting it under essential commodities in case fiscal measures fail to provide relief to consumers.
“I have been advocating for a regulator for the steel industry... this is what I did in case of pharmaceutical industry where Drug Price Control Order has been effective in checking profiteering and keeping prices in check,” Steel and Chemical Minister Ram Vilas Paswan said.
Incidentally, wholesale prices of iron and steel shot up by 5.6% during the week ended 29 March.
At the same time, Paswan said that input prices are shooting up and the government could not force the industry to absorb the cost and produce at a loss.
“We have set up a committee to ascertain whether steel prices are in tune with input costs. If it is found that prices are disproportionately high vis-a-vis production cost then the only way out is to classify steel as an essential commodity and regulate its prices,” he said.
Paswan said that he has sought Prime Minister’s intervention to initiate a slew of fiscal measures to stem the prices of steel which have gone up between 23% to 49% but pointed out that hike in India was much less than that witnessed globally.
“I have written to Prime Minister and suggested that excise duty be brought down from 14% to 8% while countervailing duty of 14% can be eliminated... likewise export should be made difficult to enhance domestic supply,” he said.
“In case, all these measures fail, then the government should bring steel under the essential commodities act purview,” Paswan said.
He cited that state-run Rashtriya Ispat Nigam Ltd has been sourcing its raw material from domestic and overseas markets and was still registering profits.
“So, if raw material costs had been ripping through the bottomlines of steel companies then RINL wouldn’t have made profits,” Paswan pointed out.
The minister took a dig at the Madhu Koda government in Jharkhand for not taking a firm decision on the Chiria Mines issue. “The Jharkhand government’s deep slumber could sound a death knell for the steel industry,” he said.
Paswan said SAIL has proposed setting up a 12 million tonne (MT) greenfield project in the state while ArcelorMittal plans 12 MT plants in Jharkhand and Orissa respectively.
“The government of Jharkhand will have to take a firm decision in the national interest. Prime Minister and myself will be in Bokaro on 22 April and will take up the issue with the state government,” he said.