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Union Budget: Nothing to cheer for farmers, industry

The maiden general budge of the BJP-NDA government at the Centre, which had a lot of expectations from the state, brought no good news for the steel industries in Mandi Gobindgarh district.

punjab Updated: Jul 11, 2014 14:54 IST
Navrajdeep Singh
Navrajdeep Singh
Hindustan Times

Earlier, a major producer of steel and iron in the country, unfriendly policies of the central and the state governments clubbed with high input costs, the steel town of the state has been losing its sheen.

The industry has been seeking the implementation of deemed credit on purchase of recycled scrap and reduction in central excise duty from 12.3% to 8%. Steelmakers buy duty-levied scrap from dealers but, cannot claim a tax rebate on it as dealers do not have the necessary documents from the central excise department to claim a rebate on the purchases.

Fur nace Association of Mandi Gobindgarh president Mohinder Gupta said there was no difference between the budget of the new government and that of the UPA-I and UPA-II.

“The steel industry remained empty handed as there was no relaxation from the central excise duty and 2.5% of the custom duty on scrap imported from outside country,” he said.

Over the past year, when smaller steel re-rolling mills have been shut down, even bigger steel industries in Mandi Gobindgarh have found it less lucrative to do business because of lack of encouragement from the central government.

There are more than 110 steel re-rolling mills in the district of which 30% were shut down, while 20% are on the verge of closure.

All India Steel Re-rolling Mills Association president Vinod Vashisht said, “We have been asking the central government to implement deemed credit on the purchase of scrap to enjoy tax rebate, for past 10 years, but successive governments have failed to take note of our demands.”

Saying that the budget carried nothing for them, he claimed that they were disappointed with the NDA government whom they expected to come up with proindustry policies.

Recently, steel industry owners in Mandi Gobindgarh threatened to go on a two-day strike following the Punjab Excise and Taxation Department's new proposal of levying tax on iron and steel items as per the electricity consumption of a unit. However, it was suspended after the government formed a three-member panel to reconsider the proposal.

First Published: Jul 11, 2014 14:34 IST