Home > Money > Budget > Budget News & Analysis FEBRUARY 26, 2002 | 10:10 IST    Feedback 


     
Interviews
Business Headlines
Corporate Headlines
Columns

Click Here!

 Portfolio Tracker
 

  My Portfolio

The Union Budget 2001-02
Economic Survey 2000-01
Exim Policy 2001-02
Credit Policy 2001-02
Railway Budget 2001-02
Budget Tutorial
Budget Process
Budget 2000-01
Budget 1999-2000
 



Run-up to the Union Budget 2002-03: Steel

Background

India is the tenth largest producer of steel globally. The Indian steel industry, which had witnessed an average annual growth rate of around 18% during 1994-95 and 1995-96, has been in the grip of a slowdown in recent times.

Since 1996-97, the steel industry has been suffering from over-capacity. The recent move by the US to impose anti-dumping duty on Indian and other foreign steel companies has come as a blow for the beleaguered Indian steel industry. The US imports roughly 1.1 mn tonnes of steel from India.

Steel Production (‘000 tonnes)

Month

Steel Structurals

Bars and rods

HR coils/skelp

HR sheets

CR coils/sheets

GP/GC sheets

Finished steel

Apr-Dec 01

1,649

7,363

5,768

410

3,230

1,407

22,234

Apr-Dec 00

1,758

6,811

6,158

361

3,024

1,126

22,039

Change

-6.2%

8.1%

-6.3%

13.6%

6.8%

24.9%

0.9%

Source: Joint Plant Committee

Key Inputs
Iron Ore, Nickel Oxide, Alloyed and Unalloyed Nickel, Ferro Nickel, Power, Coal etc.

Products
Steel Structurals, Bars & Rods, HR Coils/Skelp, HR/CR Sheets & Coils, GP/GC Sheets, Finished Steel, etc

Duty Structure

 

Excise

Customs (Basic)

 

2000-01

2001-02

2000-01

2001-02

Products

 

 

 

 

HR Stainless Steel Slabs

16%

16%

25%

25%

HR Coils Seconds & Defectives

16%

16%

25%

35%

HR Coils Other than Seconds & Defectives

16%

16%

25%

25%

CR Coils

16%

16%

35%

35%

Stainless Steel Slabs

16%

16%

25%

25%

Inputs

 

 

 

 

Tin Mill Black Plate Coils (for mfr of tin plates only)

16%

16%

25%

25%

Coking Coal <12% ash

Nil

Nil

5%

5%

Coking Coal >12% ash

Nil

Nil

15%

15%

Metallurgical Coke Imported by mfr of pig iron or steel using blast furnace

Nil

Nil

15%

5%

Pig Iron

16%

16%

15%

15%

Ferro Alloys

16%

16%

25%

25%

HBI & Sponge Iron

16%

16%

25%

25%

Steel Melting Scrap

16%

16%

5%

5%

Ingots of Iron & Non Alloy Steel

16%

16%

25%

25%

Billets, Blooms < 0.6% Carbon

16%

16%

25%

25%

Nickel Oxide Sinter

16%

16%

5%

5%

Unwrought Nickel

16%

16%

5%

5%

Zinc

16%

16%

35%

35%

Ferro Nickel

16%

16%

5%

5%

Major announcements made in previous year's budget

  • Concessional import duty of 5% for melting scrap extended to all units irrespective of the technology adopted for melting
  • Customs duty on seconds and defective HR coils increased from 25% to 35%.

Industry's demands from Union Budget 2002-03

Some of the key demands made by industry associations such as CII, Cold Rolled Steel Manufacturers Association (CORSMA) etc are as follows:

  • Supplies of Indian steel to projects / industries enjoying concessional duty under project import condition should be treated as deemed export so that the industry can avail of deemed export benefits.
  • Basic Customs duty on the following critical inputs should be reduced to facilitate indigenous industry to become competitive.

No.

Item

Customs Duty

CII Proposal

  

  

2000-01

2001-02

1

Limestone with silica content <0.69%

25%

5%

2

Non-coking coal with ash content <12% for metallurgical purposes

25%

5 %

3

Micro Silica / fume silica

35%

15 %

4

Graphite Electrode of size above 24inches

25%

5 %

5

Charge nickel

15%

5 %

6

Zinc

35%

25%

  • Excise duty on galvanised sheets should be reduced from 16% to 8%.
  • Concessional rate of 8% excise duty for GC sheets should be allowed, since these are used in low cost roofing and do not get Modvat benefit.

Key Players
Steel Authority of India, Essar Steel, Tata Iron and Steel, Jindal Iron & Steel, Jindal Vijaynagar Steels, Jindal Strips, Mahindra Ugine Steel, Mukand, Electrosteel Castings, Ispat Industries, Sesa Goa, Tata SSL.

YOU MAY ALSO WANT TO READ:
The Rediff Budget Special
The Rediff-Dun & Bradstreet Budget Analysis
Run-Up To The Budget
Money


 
  © 1996 - 2002 rediff.com India Limited. All Rights Reserved.