Mumbai: The reduction in excise duty on capital goods and automobiles proposed in the 2014-15 interim budget may help steel companies beat the slow domestic demand growth to some extent, top executives of steel companies said on Monday.

“The interim budget is positive for us owing to its thrust on growth which is good for the steel industry. The lowering of duties on capital goods and automobiles will help strengthen the demand for steel," C.S. Verma, chairman of Steel Authority of India Ltd (SAIL), the second-largest Indian steelmaker, said in an e-mailed reply to a questionnaire. “This continued thrust on development of infrastructure and manufacturing will help industrial growth in the long term," Verma added.

Union finance minister P. Chidambaram proposed a cut in excise duty on capital goods to 10% from 12%, while on small cars he cut excise duty to 8% from 12%.

Excise duty on sports utility vehicles (SUVs) was cut to 24% from 30% while on large and mid-sized cars, the levy was reduced to 20% from 27%, in the proposals.

However, there was also disappointment in the steel sector as no excise cuts were announced specifically for them. “The proposal to reduce excise duty on automobiles in the current economic environment is a welcome step," said Firdose Vandrevala, executive vice chairman, Essar Steel India Ltd. “However, it would have been more meaningful and impactful if the excise duty on steel would have been reduced. This would have had a positive, deeper influence on a wider section of Indian Industry."

Shares of top steel companies ended mixed on the Bombay Stock Exchange (BSE).

Shares of largest steelmaker Tata Steel Ltd rose 0.66% to 373.50; SAIL ended at 60.20, down 2.03%, while JSW Steel Ltd rose 1.68% to 848.45.

India’s benchmark Sensex index gained 0.42% to 20,464.06 points.

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