Reactions of Mr. Moosa Raza, President, Indian steel alliance on the Union Budget
The Union Budget 2006-07 has
a judicious and pragmatic mix of immediate and long term impact on
the steel industry. Steel industry welcomes the corrections on the
inverted duty structure, the reduction in customs duty on zinc,
refractories, iron ore and catalysts etc. The reduction of excise on
small cars is a sound and helpful measure and should help consume
more steel. However, it is bound to feel the impact of the increase
in MAT by 2.5%, which an expanding steel industry will not be able
to recover in 7 years, removal of exemption under 10 (23) G and
service tax. Net outflow on account of these increases more than
offsets the beneficial impact of corrections. The proposed changes
in the definition of captive consumption for accessibility to coal
is a mixed blessing. The steel industry had hoped for some relief in
the excise duty, especially on these products that go into the
construction. This has not happened.
However, the increased focus on infrastructure development, the
focus on mega power projects, the NHAI quadrilateral, urban renewal
mission and other social sectors, shipping etc. is bound to increase
the demand for steel and cement, and will give a boost to the
expansion plan of the steel industry. Steel industry is a major
provider of employment and deserved to be mentioned as such along
with other industry segments.
At the same time, the industry hopes the outlays on the
infrastructure sector fructify in creating the proposed assets on
the ground which will certainly go a long way not only in boosting
the economy as a whole but will help the steel industry to grow.
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