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The 5% export duty on pellets, which was imposed recently, should be rolled back till the time domestic steel makers become technologically sound to consume the entire production, the Standing Committee on Coal and Steel said in a report.
The panel, headed by Kalyan Banerjee, also recommended in its report, tabled in Parliament today, that the Steel Ministry should take up the matter "immediately" with its Finance counterpart.
"Till technological up-gradation is made in domestic steel plants so that they could fully consume the domestically produced pellets, government should continue with the earlier policy of zero percent export duty on pellets," it said.
This is to ensure that the huge investments made in the steel industry do not become non-productive assets and thousands of people do not loose their livelihood, it said.
With effect from January 27, government imposed a 5% export duty on iron ore pellets. According to the committee, the increase defied logic.
"The committee, therefore, recommend that Ministry of Steel should immediately take up the matter with Ministry of Finance at the appropriate level and apprise them of the action taken on the matter," it said.
It also expressed concerns over uncertain situation regarding availability of raw materials and their imprudent utilisation for domestic iron and steel industries.
"Therefore, taking into account the iron ore requirement for the domestic iron and steel industry ... The Committee recommended that iron ore resources need to be preserved for domestic utilisation as a long-term measure," it said.
It suggests Steel Ministry to draft the new Steel Policy keeping in view long-term goals of future sustainability of iron ore in the country. The Ministry, in its Action Taken Report, has said that the proposal would be " duly taken care of.
