Aimed at increasing the domestic availability of cement and steel, which he termed as the single largest contributor to rising inflation, finance minister P Chidambaram made export of steel products costly, while allowing duty free imports.
He also imposed ad-valorem duty on cement as against the existing rate of specific duty, a move that could help bring down the cost of construction material.
Replying to the debate on the Finance Bill in the Lok Sabha, he said that though there was no shortage of food in the country, certain industries like steel and cement were showing rise in prices.
Not satisfied with government's response, members of the left parties walked out of the House.
In a bid to check inflationary pressures, he made import of pig iron, mild steel products like HR Coil, CR Coil, sponge iron and semi finished products duty free. These products hitherto attracted import duty of five per cent.
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House construction products like TMT Bars and structurals have been exempted from 14 per cent Counter Vailing Duty (CVD) while removing existing five per cent basic custom duty on inputs used for steel making like metallurgical coke, ferro alloys and zinc.
"Despite the fiscal steps taken by us, some sectors like steel continue to exhibit sharp increase in prices. It contributes 21.3 per cent in the overall inflation," he said.