NEW DELHI: The government on Saturday unveiled a series of duty cuts to cool down prices of iron and steel, coal and plastics, while promising to more than double the subsidy allocation for fertilisers to cushion the impact of the Ukraine war on farmers.
Along with a reduction in import duty on iron and steel, the finance ministry also imposed import duty on a host of steel products, in a move that will benefit user industries and small-scale players that have been complaining of a massive jump in prices.
Finance minister Nirmala Sitharaman said measures are afoot to improve the availability and price of cement, through better logistics.
“Despite the challenging international situation, we’ve ensured that there are no shortages/scarcity of essential goods. Even a few developed countries couldn’t escape some shortages/disruptions. We are committed to ensure that prices of essential items are kept under control,” she tweeted, while announcing the measures.
Food, fuel and commodities have been the main drivers of price rise in recent months with the problem getting compounded by disruptions due to the Russia-Ukraine conflict.
For months user industries have been complaining of a sharp rise in steel and plastic prices and have blamed the spike in cost of inputs following the Covid related restrictions in several parts of the world. Some of these producers had also demanded a price cap, which the government had not accepted.
In the case of steel, the Centre has sought to lower customs duty on coal and other inputs, hoping that the production cost will fall and the benefit will be shared with users. At the same time, the imposition of export duty of 15-50% (which was increased in several cases) is meant to discourage the shipment of iron ore, pellets and several steel products from the country.
In case of fertilisers, Sitharaman said that the government will provide an additional subsidy of Rs 1.1 lakh crore over and above the budgeted level of Rs 1.05 lakh crore. Last month, the Union Cabinet had cleared a plan to increase the subsidy on phosphate based fertiliser from Rs 21,000 crore to Rs 61,000 crore for the kharif season (April-September), amid indications that the subsidy bill may be in the region of Rs 2.25-2.5 lakh crore this year.
Along with a reduction in import duty on iron and steel, the finance ministry also imposed import duty on a host of steel products, in a move that will benefit user industries and small-scale players that have been complaining of a massive jump in prices.
Finance minister Nirmala Sitharaman said measures are afoot to improve the availability and price of cement, through better logistics.
“Despite the challenging international situation, we’ve ensured that there are no shortages/scarcity of essential goods. Even a few developed countries couldn’t escape some shortages/disruptions. We are committed to ensure that prices of essential items are kept under control,” she tweeted, while announcing the measures.
Food, fuel and commodities have been the main drivers of price rise in recent months with the problem getting compounded by disruptions due to the Russia-Ukraine conflict.
For months user industries have been complaining of a sharp rise in steel and plastic prices and have blamed the spike in cost of inputs following the Covid related restrictions in several parts of the world. Some of these producers had also demanded a price cap, which the government had not accepted.
In the case of steel, the Centre has sought to lower customs duty on coal and other inputs, hoping that the production cost will fall and the benefit will be shared with users. At the same time, the imposition of export duty of 15-50% (which was increased in several cases) is meant to discourage the shipment of iron ore, pellets and several steel products from the country.
In case of fertilisers, Sitharaman said that the government will provide an additional subsidy of Rs 1.1 lakh crore over and above the budgeted level of Rs 1.05 lakh crore. Last month, the Union Cabinet had cleared a plan to increase the subsidy on phosphate based fertiliser from Rs 21,000 crore to Rs 61,000 crore for the kharif season (April-September), amid indications that the subsidy bill may be in the region of Rs 2.25-2.5 lakh crore this year.
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