'The Budget is encouraging for the steel sector'

Naveen Jindal

In general, the Budget has been encouraging for the steel sector. To increase the duty on seconds and defective steel has been a long standing demand. That has been increased to 40 per cent. Earlier it was 35 per cent. Aluminum duty has been reduced from 25 per cent to 15 per cent.

In the steel industry, a lot of aluminum is used. That is again a boost for the steel sector. Then overall duty reduction from 35 per cent to 30 per cent on steel items. That we were hoping it would be kept at 35 per cent. Then steps like additional 15 per cent appreciation. Although it is a good step, it is not enough.

Increase in outlay for infrastructure is a good step. Infrastructure is directly related to steel consumption. So when the government gives a boost to infrastructure, it automatically boosts the fortunes of steel, cement etc.

Government has reduced the 10 per cent dividend tax. That is again a good step. The government has removed the three per cent surcharge and put in five per cent surcharge.

All the time the government is focusing on increasing the taxes for improving its revenues, but never really focusing on reducing its expenses. The government needs to take steps to cut down its cost of operations. The industry is always trying to improve its operations, cut down the cost, but the government doesn’t seem to be doing the same.

Last year the government spoke about labour reforms, but nothing really has happened on that front. Government should focus on cutting down its costs, cutting down number of ministries, cutting down its employees. Reduce its expenses, rather than taxing.

Naveen Jindal is MD, Jindal Steel and Power Limted.

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