Budget update - Indian miners cry foul over iron ore export tax hike

Tuesday, 01 Mar 2011, PTI

Indian finance minister Mr Pranab Mukherjee’s move did not gel well with the Federation of Indian Mineral Industries, which saw steel cartel of few majors behind the hatching of the move and termed it as a huge blow for domestic iron ore producers.

Mr RK Sharma general secretary of FIMI, while observing that the entire proposal was self defeating, warned that production will come down as a result of which steel prices will go up making end users suffer.

He said “The entire proposal is self defeating. It too means a huge loss to the exchequer, he said adding the future of 1 million people directly employed with the mining industry is also at stake.”

Tags : raw material, steel mills, Steelmakers,

SAIL Chairman C. S. Verma's reaction to the Budget

New Delhi, 28 February, 2011

"The Budget is firmly growth-oriented and has various positives for the steel industry.

The Govt’s continued thrust on development of infrastructure and manufacturing will help steel demand in the country to grow. Besides, higher support for the housing sector is a step in the positive direction.

"Higher export duty on iron ore has been a long pending demand of the steel industry and the Budget has taken care of the issue by increasing the export duty to 20%. This should ensure higher availability of iron ore for the Indian steel industry.

Again, withdrawal of export duty on pellets should encourage installation of pellet plants by mining companies. More pellet plants in the country will also benefit the steel industry.

"Further, reduction in surcharge on income tax from 7.5% to 5% will have a positive impact on domestic companies, making available disposable surplus for investment. The proposed Constitutional Amendment Bill on GST is also a welcome development."