SAD gains for manufacturing: Rs 2,427 crore

The domestic manufacturing sector is likely to save Rs 2,427 crore on account of the removal of the special additional customs duty (SAD) of 4 per cent.

Data available with Business Standard Research Bureau show that 1,095 companies imported raw material, capital goods, stores and spares worth Rs 60,680 crore during 2002-2003.

Assuming that all these companies will continue with the same level of imports next year, the removal of SAD will translate into savings of Rs 2,427 crore.

Of this, savings on raw material imports would be around Rs 1,791 crore. These companies will save Rs 269 crore on imports of stores and spares and Rs 232 crore on the import of capital goods.

Steel Authority of India Limited (Sail) will be the largest beneficiary of the duty cut with likely savings of Rs 92.72 crore. Sail imported raw material worth Rs 2,318 crore in 2002-2003.

Hindalco will be yet another major beneficiary, with savings of Rs 86.41 crore.

Ruchi Soya will benefit by Rs 63.85 crore, Reliance Industries by Rs 61.95 crore, followed by Sterlite Industries (Rs 53.24 crore) and Bharat Heavy Electricals Ltd (Rs 51.32 crore).

Steel companies will save Rs 275 crore on account of the removal of SAD.

The pharmaceuticals industry is likely to gain Rs 158 crore, while fertiliser companies stand to benefit by Rs 167 crore.

The other major industries which will make gains include aluminium (Rs 106 crore), technology (Rs 101 crore) and diversified companies (Rs 136 crore).

Big-ticket items

• The manufacturing sector to save Rs 1,791 crore on raw material imports
• Sail will be largest beneficiary of the removal of the special additional customs duty (SAD) of 4 per cent with a likely savings of Rs 92.72 crore
• Steel companies will save Rs 275 crore from SAD repeal. Pharmaceuticals may gain Rs 158 crore and fertiliser companies stand to benefit by Rs 167 crore
• Hindalco will be a beneficiary with Rs 86.41 crore savings