Demand for steel sector support package sent to finance ministry

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New Delhi, April 27 (IANS) The demand for a support package for the steel industry has been referred to the finance ministry, union minister Vishnu Deo Sai said on Wednesday.

“Some domestic steel manufacturers associations and other stake holders have represented for working out a suitable comprehensive package to support steel sector. The representations have been forwarded to Department of Financial Services for consideration,” the minister of state for steel and mines said in a written reply to the Rajya Sabha.

The minister clarified that the government, however, was not preparing a bailout for the steel sector.

“Representations received from Indian Chamber of Commerce and Indian Steel Association to consider working out a suitable comprehensive package to support steel industry, have been sent to Department of Financial Services,” he added.

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The government said that since the global steel industry is going through a severe downturn, demand slowdown and global over-capacity have resulted in very low international steel prices.

“Major steel producing countries are adopting a predatory pricing strategy and exporting at prices, apparently lower than its cost of production, in a bid to capture markets like India. This has resulted in declining profitability of Indian steel companits,” he said.

The minister said that for reducing stress in the steel sector, the Reserve Bank of India had extended 5/25 scheme in July 2015, whereby longer amortization period has been allowed for loans to projects in infrastructure and core industries sectors.

He added that the government also increased the peak rate of basic customs duty on both flat and non-flat steel to 15 percent from 10 percent in the 2015-16 union budget.

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