Steel producers move to block Paswan’s regulator plan

March 20th, 2008 - 9:24 pm ICT by admin  

A file-photo of Manmohan Singh

New Delhi, March 20 (IANS) The Indian Steel Alliance, a leading trade lobby, has asked Prime Minister Manmohan Singh to block a move by Steel Minister Ram Vilas Paswan to set up an independent watchdog to regulate the commodity’s prices in the country. “Any such step will adversely impact the existing steel manufacturing plants and also dampen future growth of the industry,” alliance president Moosa Raza said in a letter to the prime minister Thursday.

“Any talk of price regulation, imposition of export duty, removal of import duty will prove to be highly counterproductive,” Raza said in the letter on behalf of the alliance. The alliance has companies like Jindal Steel and the state-run Steel Authority as members.

He argued that such an authority could, at best, control prices at the manufacturer level. However, there are thousands of intermediaries who are beyond the ken of any regulator, Raza added.

He warned that price regulation would benefit only these intermediaries. That would, in turn, encourage corruption among the inspecting agencies.

Instead, the government should respond to the high prices by rationalizing excise duty on steel products and introducing a policy to ensure allotment of dedicated iron ore to the industry, he added.

“Any credible solution to the steel price rise lies in encouraging the development of additional manufacturing capacity. And for that, the government will be required to provide iron ore security to the steel sector,” Raza said.

He denied that steel producers were jacking up prices, and said that the ruling domestic prices were much lower compared to the international prices.

Peeved at the repeated price hikes by steel producers, Paswan had recently asked Prime Minister Manmohan Singh to re-classify the alloy as an essential commodity, withdrawing export incentives from them and constituting a regulator for the sector.

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