Govt to consider reducing excise duty on paper to 8 pc

New Delhi, Jan 11 (UNI) The Centre will deliberate on reducing excise duty on paper and paperboard from present 12 per cent to 8 per cent in order to enable the paper industry to grow at 7-8 per cent.

''We will consider the demand of the industry on excise and customs duty and will try to provide widest possible acceptance to them,'' Minister of State for Industry Ashwani Kumar today said at the 7th Annual General Meeting of Indian Paper Manufacturers Association (IPMA) here.

IPMA had, in a submission to the government, demanded the rationalisation of excise duty at 8 per cent across all varieties of paper and paperboard as also retention of customs duty on imports at the current 12.5 per cent.

The industry representative also urged the government to create a technology upgrade fund to enable paper manufacturers to access modern technology to overcome obsolescence losses.

''Any thing necessary to take the paper industry up to the Asean structure will be done,'' Mr Kumar told reporters on the sidelines of the meeting.

The minister urged the industry to come up with innovative ideas by adopting ''out of the box thinking'' and said ''any specific policy initiative that you want, we will take it to the Cabinet after holding proper interaction with the related bodies''.

IPMA member list includes companies like Ballarpur Industries, ITC Ltd, Hindustan Paper Corporation and JK Paper Ltd.

Earlier, IPMA President Rajeev R Vederah said in his address, ''While a slew of new framework agreements on comprehensive economic cooperation between India and several countries are being put in place for facilitation of bilateral or multilateral trade under FTAs/RTAs which show a conspicuous tilt towards imports, policy support to allow the industry to gain global competitiveness is somewhat lacking.'' He asked the government to allow captive plantation in the paper industry saying that if this is done, ''there will be no stopping the Indian paper industry gaining the stature of a serious global player''.

The manufacturers are dealing with a shortage of raw material to meet the increasing demand of paper and paper products.

The paper industry is poised to increase its current 7.2 million tonnes capacity in 2005-06 to 13.95 million tonnes in 2015-16.

''Over the next 2-3 years, more than Rs 10,000 crore capital expenditure is expected in the industry focusing mainly on brownfield expansion, de-bottlenecking and enhancement of efficiency,'' Mr Vederah informed.

India's domestic paper market is estimated to be about Rs 20,000 crore.

Looking at the growth prospects of the industry, foreign funds interest is growing. The investment arm of the World Bank, International Finance Corporation, has established association with atleast three IPMA member mills. Other firms, such as Goldman Sachs, have been showing keen interest in picking up equity stakes in the paper manufacturing companies.

UNI