Centre's tax moves help ease prices of steel, edible oil

The government's move to cool prices have shown results as domestic steel prices fell sharply on the back of these measures.

The imposition or increase in export duty on various steel goods, according to official data, helped cut the price of galvanized plain sheet and coils by over 10% between May 22 and June 8, Times of India reported.

Similarly, TMT prices are down 9.3%, while HR and CR coil prices are down 6% and 8%, respectively.


Edible oil prices also cooled a bit as the measures have also resulted in a slight decrease in the wholesale prices of soya oil, sunflower oil, and palm oil. The lifting of the ban by Indonesia on palm exports also eased the pressure.

"Government's supply-side interventions seem to have helped pulses and edible oils as import duties have been cut on both these commodities over the past year. Government had also secured agreements for imports of pulses from multiple countries last year, which together with healthy production, has been bringing down pulses inflation for the past 11 months," said D K Joshi, chief economist at ratings agency Crisil.

India's benchmark inflation rate, as measured by the Consumer Price Index (CPI), dropped to 7.04 percent for the month of May from an eight-year high of 7.79 percent in April, owing to a slight decrease in food prices.

Oil and fat inflation rose by 13.3 per cent in May.

The impact of duty cuts in plastics is likely to show impact in a few weeks.