At the same time, Mr Chidambaram announced a hike in the export duty on iron and steel to augment domestic supply and contain prices.An export duty of 15 per cent has been imposed on specific primary forms and semi-finished products, 10 per cent on rolled products and cold-rolled pipes and tubes and 5 per cent on galvanised steel.
In his hour-long reply in the Lok Sabha to the debate on the Finance Bill, the Minister assured the House that the country was headed for a record production and procurement of rice and wheat and as such there was no cause for any concern over possible food shortages in India which was haunting several countries.
After the reply, the House passed the Finance Bill with official amendments amid a walkout by the Left parties.
Disclosing that steel accounted for as much as 21.3 per cent of the rise in inflation, which stood at 7.33 per cent, the Minister cut the basic customs duty on sponge iron, ingots, semi-finished HR and CR coils, bars and rods from five per cent to nil.
Countervailing duty, which is 14 per cent now, has been removed on TMT bars and structural bars.
The five per cent basic customs duty has been removed for three critical components of steel making -- metallurgical coke, ferro alloys and zinc.
Basic customs duty on skimmed milk powder has been reduced from 15 per cent to five per cent and on butter oil from 40 per cent to 30 per cent.
Export duty on basmati rice will be charged at Rs 8,000 a tonne and the minimum export price will be 1,000 dollars a tonne.