By announcing a host of measures, Finance Minister P Chidambaram aims to bring down the steel prices, which have accounted for 21.3 per cent of the current inflation, the rate of which is hovering around 7.33 per cent.
The finance minister recently announced stringent measures to curb down the steel prices by levying 15 per cent export duty on primary steel and HR coils and 10 per cent export duty on CR coils, while the custom duty on steel has been cut from 5 per cent to nil.
Also the Countervailing Duty (CVD) on TMT bars has been abolished and custom duty on steel have been reduced from 5 per cent to nil.
The FM's announcement has resulted in the fall of steel prices by Rs 1,000 per metric tonne (PMT)- Rs 1, 200 per metric tonne (PMT) but the manufacturing industry in Punjab was still keeping their fingers crossed.
Talking to Business Standard D S Chawla, former president United Cycle and Parts Manufacturing Association, Ludhiana welcomed the steps taken to curb steel prices said that increase in steel prices in recent past has put the bicycle manufacturing industry in doldrums.
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This has also forced closure of around 40 per cent small enterprises based in Ludhiana that were engaged in manufacturing bicycle parts, with the rest cutting their production by around 30-35 per cent.
He said that the measures taken by the government to check in the arbitrarily rising steel prices could prevent the revision of bicycle prices that was on the cards. With input prices rising the bicycle manufacturers were forced to go in for revision of bicycles by around Rs 200 in the past.
Chawla maintained that it was too premature to comment on by how much the steel prices would come down but nonetheless if steel prices come down by considerable amount it could be beneficial for the manufacturing industry.
Meanwhile, S C Ralhan, regional chairman, Engineering Export Promotional Council (EEPC) said that still the notification levying 15 per cent export duty on primary steel and HR coils and 10 per cent duty on CR coils was still awaited and once the notification is received they were anticipating a fall of Rs 7000 PMT in the prices of steel within one week.
He demanded that notification should be issued at the earliest so that the manufacturing units could also heave a sigh of relief.