After being pressurised by the government to reduce and hold its priceline on three occasions this year, India’s largest private sector steel company Tata Steel on Wednesday hit back, saying government is not doing its bit to help industry keep prices in check. The steel ministry returned the favour, saying if inflation continues to remain high it will be forced to interfere on prices again.
“Everybody needs to chip in to keep inflation from going up,” said B. Muthuraman, managing director, Tata Steel. “So far we have reduced prices but steel consuming sectors and the government have not played a positive role. I am not sure of the intention of secondary producers as even after reduction, prices at the retail level remain high.”
Pointing that price of steel in India is lower than international prices by Rs 15,000-20,000 per tonne, Muthuraman indicated that government could have done reduced excise duties to help steelmakers. “Collection from excise from the sector has doubled but still it has remained the same,” he said.
Muthuraman's comments come at a time when steelmakers are waiting for the three month moratorium on prices to end next month.
Courtesy a rise in prices of long term coking coal contracts which came into effect this month, steel prices are set to go up again in August.
Responding to his comments, steel secretary R S Pandey said that had it not been for government's intervention, prices would have been much higher.
"We are not in a regulatory regime and don’t even have powers to seek exact prices from companies,” he said.
“Till February, prices went up in accordance with international trends and we did nothing,” he added. “Only when inflation starting moving up that we had to intervene. We did not have many options but even after all this companies had margins of over 20 per cent in June.”
The government will adopt a wait and watch policy on any steel price hike next month, Pandey said. “We will see who is increasing prices and by how much and then decide. If inflation continues to go up then we will intervene.”