Date:30/04/2008 URL: http://www.thehindu.com/2008/04/30/stories/2008043058240100.htm

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Slew of new measures to check inflation

Sujay Mehdudia

Changes in duty structures of steel, cement and skimmed milk powder

Finance Bill passed after intense debate
Left parties stage walkout

NEW DELHI: The Central government on Tuesday cut the import duty on steel, imposed export duty on steel products, modified the duty structure on cement and brought down the duty on skimmed milk powder as part of anti-inflationary measures that are likely to cost the exchequer Rs. 1,500 crore.

Replying to the debate on the Finance Bill in the Lok Sabha, Finance Minister P. Chidambaram announced the measures aimed at increasing the domestic availability of cement and steel. He said the two items were the single largest contributor to inflation. Mr. Chidambaram imposed a 12 per cent ad valorem duty on bags costing over Rs. 250 a 50 kg, against the current specific duty of Rs. 600 a tonne.

He made the import of pig iron, mild steel products such as HR coil, CR coil, sponge iron and semi-finished products duty-free against a five per cent import duty earlier.

TMT bars cheaper

Construction products such as TMT bars and structurals were exempted from the 14 per cent Counter Vailing Duty (CVD). The existing five per cent basic customs duty on inputs used for steel-making such as metallurgical coke, ferro alloys and zinc has been removed. To make steel exports less attractive, Mr. Chidambaram announced a 15 per cent export duty on specified primary forms and semi-finished products and hot rolled coils.

A 10 per cent export duty has been levied on specified rolled products such as cold rolled coil and sheets, pipe and tubes. A five per cent duty was imposed on overseas sale of galvanised steel in coil and sheet forms.

An export duty of Rs. 8,000 a tonne on basmati rice has been imposed, while the minimum export price reduced from $1,200 a tonne to $1,000.

The Minister also announced a reduction in the basic customs duty on skimmed milk powder from 15 per cent to five per cent. The duty on butter oil was reduced from 40 to 30 per cent.

The Finance Bill was passed after an intense debate and amid a walkout by the Left parties in protest against the Minister’s silence on their demand for a cut in the tax on petro products.