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Paswan Seeks Ban On Steel...

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As yet another tough measure to curb price rise, the Steel Ministry has recommended banning export of finished steel and hiking duty on iron ore export -- the issues which will top the agenda of meeting of the Cabinet Committee on Prices (CCP) next week.

"We have recommended a ban on exports of finished steel products completely. This recommendation has gone from my ministry to the government," Steel Minister Ram Vilas Paswan said on Saturday.

Other recommendations of the ministry sent to the CCP include cut in excise duty on the alloy from 14 to 8 per cent, abolishing import duty as well as the Countervailing Duty on steel products besides imposing 15 per cent duty on export of iron ore, he said.

The Finance Ministry has also sent a detailed note to the CCP listing options for containing inflation, which has touched a three-year high and has become a major political challenge for the government. The CCP to be chaired by Prime Minister Manmohan Singh is likely to meet on Tuesday or early, depending on the return of Finance Minister P. Chidambaram from abroad.

Paswan pointed out that at a time when global steel prices are high, the domestic manufacturers tend to focus on exports to cash in on the opportunity at the cost of domestic consumers.

He also warned that even after these measures, if steel producers do not rein in exports and reduce prices, then the government will resort to bringing steel under the Essential Commodities Act.

"But we do not want to go to such an extent. We hope the industry will act responsibly," Paswan said.

Government has already banned export of various items like non-basmati rice, cement, wheat and pulses.

On Friday, the government banned cement exports and withdrew incentives on steel in the new foreign trade policy that provides a host of incentives to meet the targeted $200 billion exports.

"To curb inflation, the government has banned export of non-basmati rice, edible oil and pulses... We are also withdrawing incentives under promotional scheme on export of cement and primary steel items," Commerce Minister Kamal Nath said unveiling the policy for 2008-09.

The government could also ban steel exports, an option that could be considered at the meeting of the Cabinet Committee on Prices next week, a top ministry official said.

Seeking to address surging inflation and sharp depreciation in the dollar amid economic slowdown, the policy cuts down customs duty in capital goods from 5 per cent to 3 per cent, a move aimed at buoying the industry whose growth slowed down to 8.7 per cent during the first 11 months of 2007-08 -- from 11.2 per cent a year-ago.

The policy coincides with the release of government data on prices that put the inflation at 40-month high at 7.41 per cent fuelled by among other things a 5.6 per cent rise in steel prices during the week ended March 29.