New Delhi: The government today said reduction in import duty on liquefied natural gas would benefit stranded gas-based steel plants and encourage more sponge iron producers to go for gas-based production route.
"The reduction in duty on imported LNG will benefit standard gas based steel plants and encourage more sponge iron producers to adopt the gas based production route which is more environments friendly," the steel ministry said in a statement.
In terms of taxes, basic customs duty has been reduced on some steel products that will largely benefit the sector, the statement said. Basic Customs Duty reduction on Nickel, too, may lead to reduction in cost of production of stainless steel.
Finance Minister Arun Jaitley in his budget speech announced that the the import duty on liquefied natural gas (LNG) has been halved to 2.5 per cent from five per cent. The steel ministry described the Union Budget 2017-18 as forward looking and directed towards raising the productivity in the economy with a focus to transform, energise and clean India.
With a keen focus on infrastructure and all round development, the budget will strengthen economic fundamentals a focus of the government since 2014. "In my experience, this is one of the finest budgets ever. It focuses on raising overall productivity of the economy with an emphasis on complete transformation of India.
This budget has laid a foundation of steel to the India Growth Story," Steel Minister Chaudhary Birender Singh said. Ministry of Steel will largely benefit from the outcome of the budget. Through affordable housing, a giant boost has been given to real estate and infrastructure sector.
This will boost real estate construction activities and will increase the demand of steel products as will the government's investment plan of Rs 64,000 crore in National Highways and Rs 27,000 crore on Pradhan Mantri Gram Sadak Yojana.
Further budgetary outlay in infrastructure and railways and creation of new airports will create a tremendous demand in the sector. The target of 100 per cent village electrification by May, 2018, will also benefit many steel producers.
The budget proposal to put aside Rs 10,000 crore for re-capitalisation of Public Sector Banks will increase their ability to partially withstand the current non performing assets (NPAs) in the steel sector and in all likelihood will also generate a scenario where they will be able to lend more to the distressed companies.
"With substantial focus on infrastructure spending, railways, aviation, defence and housing the Union Budget 2017-2018 will revive the demand for steel and steel-based products in the following months and years," it said.
