Budget proposals neutral to steel, harsh on cement sector

Mumbai, Feb 28 (UNI) Cement companies, by and large, averred that the Finance Minister's effort to tame inflation and control input prices for infrastructure development would not serve the intended purpose.

They maintain that cement accounts for about 0.5 per cent in an overall infrastructure development where bulk of the cost goes towards land procurement. The Budget proposals of 2007-08 have made it clear that selling a 50 kg bag for more than Rs 190 will have to pay more excise duty than those that sell it for less.

The change was also extended to mini cement plants that typically pay less excise duty than their larger rivals. The duty for such plants was cut to Rs 220 a tonne for holding the same price line, and raised to Rs 370 for higher prices. Earlier, the duty on cement uniform at Rs 250 per tonne.

Commenting on the Budget proposal on cement, Mr D D Rathi, CEO, Grasim Cement said ''If you take a look at the cement prices over the last 15 years, it was in keeping with the rise in inflation all along.'' ''As such, it is not going to serve the intended purpose of controlling inflation. What about inflation on the very inputs?'' Mr B Muthuraman, Managing Director, Tata Steel said on the whole, this Budget as such is neutral towards the steel sector but it is directed towards the long term growth of the Indian economy. It is more focused to bring the under-performing sectors to perform, without jeopardising the growth trajectory of the overall economy.

While the increased investment in health and education is going to bring about inclusive growth, he said the increased focus on infrastructure would support increase in the demand for manufactured goods as well as make the manufactured goods cost competitive in the long run. ''The introduction of export duty on iron ore and chrome ore is a very welcome move and is directed towards conserving the scarce resources of the country for the long term benefit of the country. Though, restricting exports volume could also have been considered,'' said Mr Muthuraman.

UNI