Govt for excise duty cut to curb steel crisis: Steel Secy

By Kanchi Gandhi and Taapsi Ramchandani, CNBC-TV18

After cement last year, steel is in the eye of the inflation storm. Last week, inflation touched a 3-year high triggered by a sharp rise in metal prices. The price of steel is sizzling hot. Last week, the metals wholesale price index jumped 42.8% due to high raw material costs and demand supply imbalance. There were global factors also at play. Iron ore contracts were being negotiated at a 65% premium internationally. And this rubbed off on prices back home.

“Prices have gone up 55% globally and 25-30% in India in the last 3 months,” said RS Pandey, Steel Secretary.

So far, the government has stepped in with a slew of measures to rein in prices-rollback of price hikes in galvanized products and withdrawal of export benefits. Analysts expect further duty cuts and possible price control by the government. However, the Steel Secretary says regulation is not on the cards.

“We are not in a regulatory regime yet and don’t think the government will dictate prices. We will ensure that domestic availability of steel improves and further measures to disincentivise exports is under contemplation,” stated RS Pandey.

Despite this assurance, there is buzz that steel may be made an essential commodity. It remains to be seen as to how far the government is willing to go to control escalating prices, that too in a possible election year.