India may take more measures to tame inflation
India is likely to take more measures to reduce industrial raw material prices by cutting down excise and customs duty on additional items as part of steps to tame inflation that is at a two-year high.
By PTI |
DAVOS: India is likely to take more measures to reduce industrial raw material prices by cutting down excise and customs duty on additional items as part of steps to tame inflation that is at a two-year high.
The Finance Ministry is considering cut in excise duty on slag and reduction in customs on petroleum coke to cut cement prices, senior government officials said here ahead of the World Economic Forum that begins today.
Having already abolished import duty on portland cement, the government is considering measures to check prices of other inputs like coal to keep cement prices under check.
While the government is open to cut import and excise duties on a number of raw materials, it is not in favour of cutting excise duty on the final product.
"We feel that the industry will not pass on the cut in excise to the consumer since the Indian cement industry is marked by oligarchy," the officials said.
The government is concerned at over 50 per cent rise in cement prices in the last one year. The industry argues prices have gone up because of various factors like rising input cost and continuous boom in construction and real estate.
Inflation for the first week of this year touched 6.12 per cent mark, prompting the Finance Ministry to announce import duty cuts on January 22 only five weeks before Budget.
The Commerce and Industry Ministry has strongly suggested that excise duty on raw material like slag be cut and import duty on petroleum coke be abolished.
The cut in duty from 12.5 per cent to nil on portland cement will have a symbolic impact. Prices are unlikely to come down as imported cement accounts for only 55,000 tonnes out of the total 155 million tonne demand.
The Finance Ministry is considering cut in excise duty on slag and reduction in customs on petroleum coke to cut cement prices, senior government officials said here ahead of the World Economic Forum that begins today.
Having already abolished import duty on portland cement, the government is considering measures to check prices of other inputs like coal to keep cement prices under check.
While the government is open to cut import and excise duties on a number of raw materials, it is not in favour of cutting excise duty on the final product.
"We feel that the industry will not pass on the cut in excise to the consumer since the Indian cement industry is marked by oligarchy," the officials said.
The government is concerned at over 50 per cent rise in cement prices in the last one year. The industry argues prices have gone up because of various factors like rising input cost and continuous boom in construction and real estate.
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Inflation for the first week of this year touched 6.12 per cent mark, prompting the Finance Ministry to announce import duty cuts on January 22 only five weeks before Budget.
The Commerce and Industry Ministry has strongly suggested that excise duty on raw material like slag be cut and import duty on petroleum coke be abolished.
The cut in duty from 12.5 per cent to nil on portland cement will have a symbolic impact. Prices are unlikely to come down as imported cement accounts for only 55,000 tonnes out of the total 155 million tonne demand.
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