01st January, 2012 to 31st January, 2012
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Cutting CRR by 1 pc to release Rs 56,000 crore in banking sector: ASSOCHAM
New Delhi, January 17, 2012: With inflation showing signs of moderation and velocity of exports increasing, industry body ASSOCHAM today called for 50 basis points reduction in repo rate to ease mounting cost of borrowings and at least one percentage point reduction in cash reserve ratio (CRR) to inject liquidity into the banking sector.
A one percentage point reduction in CRR could release Rs 56,000 crore and help fund viable projects held up due to liquidity crunch, it said ahead of the Reserve Bank of India’s monetary review on January 24. At the same time, CRR as applicable to banks must carry two to three per cent interest to ease cost of funds, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
With food inflation now showing signs of cooling off, expectations of headline inflation coming below seven per cent by March have strengthened. The recent movement in inflation numbers has also heightened expectations among policy watchers of a likely reversal of monetary policy cycle.
At the same time, concerns over growth are now taking centre-stage with the most recent numbers on GDP pointing towards slowing growth momentum, said ASSOCHAM secretary general D.S. Rawat. The aggregate deposits of banks outstanding on October-end stood at Rs 56.38 lakh crore. The CRR presently stands at six per cent. So one per cent or 100 bps reduction in CRR will inject about Rs 56,000 crore in the banking sector.
The non-food credit has four main components – agriculture and allied activities, industry, services and personal loans. Gross bank credit extended to industry (micro, small, medium and large) outstanding as on November 18, 2011 was Rs 17.71 lakh crore compared to Rs 14.65 lakh crore a year earlier. In other words, scheduled commercial banks extended an additional credit of Rs 3.05 lakh crore to industry.
The benchmark prime lending rate (BPLR) of the largest lender in the country – the State Bank of India – was 12.5 per cent on October 21, 2010 and went up to 14.75 per cent from August 13, 2011. If this is an average rate at which corporates get money, then there has been an increase of nearly 225 bps between October 2010 and November 2011 as there was no increase after the rate touched 14.75 per cent.
This increase of 225 bps on an additional credit of Rs 3.05 lakh crore would have led to an additional interest burden on the industry of almost Rs 6,878 crore. Now if the RBI was to cut the repo rate by 50 bps and if the SBI follows the cue and cuts its prime lending rate by 50 bps, then the industry will save about Rs 1,528 crore in interest payments.
Giving even one per cent interest on CRR will release substantial relief by way of interest to the banking sector to counter growing borrowing costs.
“This is not a large amount as such and therefore a cut in repo rate at this juncture will be more symbolic and play on the sentiments. The real gains will be seen only when the cycle is completely reversed,” said Mr Rawat.
On the other hand, release of CRR cut of Rs 56,000 crore can be absorbed very quickly by additional government borrowing programme of Rs 40,000 crore. Besides, banks have put their funds into government securities more than they are required to.
Although the statutory liquidity ratio (SLR) is 24 per cent, banks are keeping nearly five per cent over requirement and can draw funds using this excess amount. In fact, the RBI opened the marginal standing facility for banks to use this excess for borrowing money overnight.
Many banks have SLR of 27 per cent but still borrowing at liquidity adjustment facility (LAF) window as a lot of this is being invested in government securities. Since credit growth fuels growth, it is essential that funds flow into the economic activity. “We are also seeing that credit growth has significantly slackened as compared to the previous year,” said Mr Rawat. Top
Inequalities rise sharply in Jammu and Kashmir, Madhya Pradesh, Bihar: ASSOCHAM
New Delhi, January 16, 2012: Inequalities continue to rise among various states even after two decades of economic liberalisation, broadly implying that poor people are getting poorer and rich are getting richer, according to a recent analysis undertaken by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The average household monthly per capita consumption expenditure (MPCE) at current prices was deflated by consumer price index to arrive at a realistic measure of change in real economic well being of people across regions and classes.
The ASSOCHAM study confirms that growth rate of both average per capita expenditure and resultant demand increased during 2004-05 and 2009-10. But while the average per capita consumption expenditure remained unchanged for the poorest 20 per cent people, the average household income of the richest 20 per cent increased by 7.7 per cent.
This broadly led to increased inequalities. On an average, a rural household in the richest 20 per cent category spent more than 258 per cent of what a household of similar size falling in the poorest 20 per cent category spent in 2004-05. This difference further increased to 286 per cent in 2009-10.
“The resultant market size of richer MPCE classes too increased at a relatively faster pace,” said ASSOCHAM secretary general D.S. Rawat. “While the size of consumer markets expanded at a healthy rate of 7.9 per cent, economic inequality further widened over these five years.”
The calculated gini coefficients for states indicate that income inequalities increased in Jammu and Kashmir by 7.37 per cent, Madhya Pradesh including Chattisgarh 4.96 per cent and Bihar including Jharkhand by 4.9 per cent.
At the same time, gini coefficient values indicate falling inequalities in Orissa by 5.75 per cent, Maharashtra 3.85 per cent, Haryana 2.36 per cent and West Bengal. Rajasthan, Karnataka, northeastern states and union territories too have seen some fall in the degree of income inequalities.
“Along with achieving higher economic growth, more efforts need to be made to make it more inclusive,” said Mr Rawat adding reducing income inequalities is necessary for accelerating economic and human development. State governments must play a major role in developing social sectors and critical infrastructure. Top
Retain excise duty and service tax at current level, cut CST from 2% to 1%: ASSOCHAM
New Delhi, January 13, 2012: The Associated Chamber of Commerce and Industry of India (ASSOCHAM) has urged the government to retain the Excise Duty and Service Tax at the current rate of 10.3 per cent in its Union Budget for the al year 2012-13.
In its pre-budget memorandum submitted to the Finance Minister, Mr Pranab Mukherjee the chamber has also suggested the government to consider extending service tax net to other items for increased revenue generation.
“The government can consider selective increase in customs duty on import of items other than input materials and capital goods, besides, stake sale in PSUs is another feasible option to generate additional revenue and reduce soaring fiscal deficit,” said ASSOCHAM.
“Central sales tax (CST) rate must be cut from 2 per cent to 1 per cent to accelerate implementation of the Goods and Services Tax (GST) which is likely to push the country's economic growth by 1.4 per cent to 1.6 per cent and might add Rs.1.50-lakh crore annually to the government's kitty,” the chamber said while stressing upon the need for tax reforms.
ASSOCHAM has also urged the government to restore the CENVAT (Central Value Added Tax) credit of input taxes paid on setting up new manufacturing units, service establishments, on materials and services used in civil construction for installing machinery.
“Restoration of CENVAT credit is imperative to encourage fresh investments as it is also a fundamental principle of GST,” said ASSOCHAM. The chamber has also emphasised that apart from services mentioned in the negative list and which are currently taxed by the state governments under constitution like entertainment, rent and others, all other services must be taxed comprehensively to add to the government’s revenues.
The ASSOCHAM has also recommended the government to provide tax sops to sectors with a high employment generation potential like – civil construction, IT, ports, roads, telecom and textiles. Natural gas must be listed in the list of ‘Goods of Special Importance’ under Section 14 of the Central Sales Tax Act so that it is uniformly taxed at a lower rate across all states on the lines of commodities like crude oil, coal and steel. More so, as natural gas is a significant input in industries like fertilizer, power and gets transported throughout the country, said the apex chamber.
Apart from this the government should also do away with indirect taxes on inputs and services used in setting up infrastructure projects during investment phase to attract investment.
Surcharge and education cess should be removed as it will generate more surpluses in the hands of companies with consequential impact on investments and growth in view of the global recession.
In case there is a delay in the enactment of the Direct Taxes Code which is to be introduced from April 1, ASSOCHAM has urged the government to maintain the Personal Tax rates as per the proposed DTC.
Exemption limit of reimbursement of medical expenses for employee and his/her family should be enhanced to Rs 50,000 per annum from the present ceiling of Rs 15,000 per annum in view of the rising cost of healthcare in India.
Exemption limits in respect of house rent allowance, transport allowance, kids' education allowance and rent free accomodation should be enhanced considerably as expenses incurred in respect of above have increased significantly due to rising cost of living in light of the high rate of inflation.
The chamber has advocated introducing a weighted deduction of 150 per cent of the expenditure incurred on Corporate Social Responsibility (CSR) activities specifically covering critical areas like education, health, animal husbandry, water management, waste management, women empowerment, poverty eradication, rural development and even companies with a dedicated CSR trust or foundation.
Exemption limit for payment of leave encashment as notified by the Central Board of Direct Taxes (CBDT) in accordance with powers given under section 10 (10AA) of Rs three lakhs (since 1988) should be raised to Rs 10 lakhs with immediate effect.
Discrimination between domestic companies having Indian subsidiaries and those with overseas subsidiaries be removed as it is leading to uncertainty and risk of double taxation on income from overseas investment in the absence of a well defined foreign tax credit system. A simplified scheme for obtaining PAN in case of expatriate Indians should be introduced.
The overall limit of Rs one lakh under The Finance Act, 2006 must be increased to at least Rs 2.5 lakhs to accommodate for the expanded list, this would also act as a fillip to boost investments especially, as standard deduction has been removed.
The chamber has also stressed upon levying safeguard and anti-dumping duty to protect Indian industry from dumping of goods by other countries due to low demand in European Union and the United States, especially in case of imports from China.
Private sector must be encouraged to build storage infrastructure for agri-produce and imported commodities including petro products by providing fiscal incentive as this will help moderate inflation and spur economic growth. Besides, interest rates should also be moderated since the inflation has started abating. Top
SEBI to reform IPO process, make disclosure norms effective
New Delhi, January 12, 2012: Capital markets regulator SEBI said today it will reform the initial public offer (IPO) process and ensure that disclosure norms are made effective as the Indian financial markets undergo radical reforms to become globally competitive.
“We are looking at every aspect. The basic aim is to curb volatility, particularly on the day of listing,” said Mr Rajeev Agarwal, whole-time director of the Securities and Exchange Board of India (SEBI) while addressing an ASSOCHAM conference.
“We will follow strict disclosure norms to protect investors’ interests, create enabling environment so that financial firms become global and vigorously enforce corporate governance norms.” He said the industry should make efforts to channelise more savings into capital markets to fund capital requirements of various sectors. Only 4.6 per cent of national savings are invested in capital markets.
The country needs investments of one trillion dollars to build infrastructure in the next five years. Mr Agarwal said even pension funds can be invested as new products evolve and regulations are harmonised so that GDP growth of nine per cent can be maintained.
Meanwhile, Mr C.S. Mohapatra, director (secondary markets and UTI) at the finance ministry’s Department of Economic Affairs, said the government will remove regulatory overlaps to bring financial stability and take measures to boost corporate bond market.
However, industry leaders must take lead in reducing intermediation costs by introducing new technology and improving human infrastructure. “There is no reason to be pessimistic as India is showing second highest growth rates amid global economic gloom. There is need for next generation of reforms to increase inflows from foreign institutional investors.”
Mr Nanda Kumar, senior vice-president of the National Stock Exchange, said the current global uncertainties pose challenges and opportunities for the Indian financial sector. The industry requires innovation, efficiencies, transparency and safety to bring back investors’ confidence.
Mr R.N. Dhoot, president elect of The Associated Chambers of Commerce and Industry of India (ASSOCHAM), said watershed structural reforms have taken place in the banking sector during 20 years of pro-active reforms.
“The time has come for consolidated efforts by all stakeholders for inclusive growth,” he said adding financial sector reforms can add significantly to economic growth and also make a significant contribution to the sustainability of this growth.
ASSOCHAM secretary general D.S. Rawat said the financial system’s ability to efficiently intermediate domestic and foreign capital into productive investment and to provide financial services to a vast majority of households will influence economic as well as social stability.
Mr Rashesh Shah, chairman of ASSOCHAM National Council for Capital Markets, said Indian yearly savings total 500 billion dollars. The India growth story is in tact, he said, but four trends are worrisome. High inflation, rising interest rates, burgeoning fiscal deficit and the currency under pressure have led many to conclude that economic reforms are stuck for the moment.
“We need to turn savings into productive investments rather than letting them go in gold and real estate. Foreign investments in the insurance sector and a healthy bond market are needs of the hour.”
Others present during the conference were Mr Anil Agarwal, past president of ASSOCHAM, Mr S.C. Agarwal, co-chairperson of ASSOCHAM National Council for Capital Markets, and Mr Manish Kedia, director and head of debt practices at Resurgent India. Top
Mali signs second credit line of credit with Exim Bank of India
New Delhi, January 11, 2012: The mineral-rich west African nation of Mali today signed a 100 million dollar line of credit with the Exim Bank of India for transmission of power from neighbouring Cote d'Ivoire to the capital city of Bamako, visiting president Amadou Toumani Toure said today.
A similar a 125 million dollar line of credit (soft loan) was signed in 2008. “We are looking for Indian investments in mining, traditional and renewable power generation, transport, agriculture, fisheries and food processing,” he said while addressing a joint business meeting organised by industry bodies ASSOCHAM, CII and FICCI.
Mr Toure, who is in the national capital on a three-day state visit along with a 53-member delegation, said Mali will give concessions to Indian companies interested in the mining sector. The country is rich in iron ore, cement, limestone, bauxite and manganese. It is the continent’s third largest producer of gold after South Africa and Ghana, and second largest producer of long staple cotton after Egypt.
He called for ramping up bilateral ties across other sectors as well to take the 77 million dollar two-way trade with India to the next level. Indian exports to Mali include electricity transmission, cotton fabrics, cycle parts, machinery and machine parts, transport equipment, drugs and pharmaceuticals, and processed food items. The imports from Mali are limited to raw cotton and few agro products like shea nuts.
India has provided several lines of credit to a swathe of infrastructure projects to Mali. These include 15 million dollars for rural electrification, 12 million dollars for agro-machinery and tractor assembly plant, 11 million dollars in three tranches for electricity transmission and distribution projects from Cote D'Ivoire to Mali, 20.62 million dollars for acquiring railway coaches and locomotives from India and 15 million dollars for development of agro-industries.
Mali is a member of the West African Economic and Monetary Union which provides link with 330 million potential customers. That gives scope for Indian small and medium businesses to collaborate with companies in Mali.
Among those present during the meeting were ASSOCHAM’s senior member V.B. Soni who has been Indian ambassador to Mali, member of CII’s Africa committee S. Kuppuswamy and FICCI’s senior member Amitabh Agrawal. Top
Medium sector IT/ITeS in Hyderabad & B’lore might shift to Philippines: ASSOCHAM
New Delhi, January 10, 2012: Current developments taking place in the Southern part of the nation clearly indicate that India's prominence as an Information Technology/Information Technology Enabled Services (IT/ITeS) hub is fast fading away as many of the ITeS/BPO firms especially, medium enterprises from Hyderabad and Bangalore are shifting or expanding their bases in Philippines owing to concerns pertaining to infrastructure, cost of doing business and availability of skilled labour observed the just concluded survey undertaken by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
"The driving forces are multitude, ranging from ease of doing business, availability of abundant English speaking workforce at lower wages, better infrastructure to government incentives. It is imperative for Governments at the Centre and States to quickly initiate remedial measures on war footing to stem the loss as the capital flight will not only severly affect the growth and employment but threaten India's leadership in the knowledge industry,” said Mr D.S. Rawat, national secretary general of ASSOCHAM.
According to the ASSOCHAM Eco Pulse (AEP) Study titled “Sustaining India’s IT/ITeS Leadership”, the prevailing macroeconomic and sectoral conditions have been resulting in a shifting of ITeS/BPO industry away from India to Philippines-especially from Hyderabad and Bangalore. Such a trend is yet not being noticed in the National Capital Region and Pune.
The chamber study said, it is an undisputed fact that in India has evolved as a major GDP contributor and plays a vital role in employment generation and export promotion. The sector helped the nation to create Brand Equity. As a proportion of national GDP, the IT/ITeS sector revenues have grown from 1.2 per cent in 1997-1998 to an estimated 6.4 per cent in 2010-2011. Its share of total Indian exports (merchandise plus services) has increased from less than 4 per cent in 1997-1998 to 26 per cent in 2010-2011.
India is presently a premier destination for the global off-shoring market of IT/ITeS, accounting for almost 55 percent in 2010 as compared to 49 percent in 2005. The country has emerged a dominant player in global IT services outsourcing with increase in its share to 70 percent in 2010 from 52 percent in 2005. On the other hand, India’s share in BPO sourcing market has declined from 45 percent in 2005 to 34 percent in 2010, albeit it continues to be the leader in this space.
Mr Rawat said that the country’s prominence as an IT/ITeS hub is declining owing to diminishing employable talent pool, high cost of doing business due to inefficiencies of power, transport, security, concentration in metros due to inadequate infrastructure in other towns etc. Currently, over 90 per cent of total revenues of the sector are generated from Tier I locations, which are nearing peak capacities in terms of infrastructure support. Therefore, there exists a pressing need to fast-track the development of alternate delivery locations in Tier II and III cities.
Indian IT/ITeS sector has invested and developed world class facilities, extensive talent development initiatives, disaster recovery and business continuity, high cost of transport, enhanced security, captive power generation, UPS and other equipments which have over all created a cost disadvantage of 10 – 15 percent as compared to other emerging markets. Hence, India is hard pressed to manage its competitiveness in the wake of rising costs and increasing competition.
The IT/ITeS sector is essentially that of less capital intensive and has lot of flexibility in operations, thus, it can be relocated in a very short time. Therefore, there exists a real threat to the country in terms of its swift relocation to other competing locations like Philippines, Vietnam, China, Poland, Hungary, Mexico, Brazil, Egypt, to name a few. Already, many MNCs and Indian companies are setting up centres in these countries.
Presently ITeS/BPO firms are finding the retention of the suitably trained employees a big problem. Apart from this, the deficient infrastructure, law & order issues, and shrinking margins in the light of increasing costs have forced the Indian firms to explore emerging geographies. Among all the available alternatives, Philippines is presently offering most suitable alternative to Indian IT/ITeS firms. These smaller firms typically employs 15 to 18 people, both technical and support staff, each. Thus flight of each small firm would result in a loss of about 12 to 15 jobs. In addition, there is a loss of their contribution to the GDP.
Additional job creation in the Indian IT/ITeS sector was estimated as 2.4 lakhs during the 2010-11 fiscal. This was about ten percent of the present level of employment in the sector. Therefore, the flight of smaller software firms outside the country would affect the growth and employment prospectus enormously.
The 12th Five Year Plan Working Group on Information Technology Sector has indicated a number of measures to promote the industry. ASSOCHAM, however, identified that widening the Software Technology Parks (STP) networks to semi-urban and rural areas and extending the income tax benefit to STP units beyond March 2011 would become the single most effective policy measure to stem the flight of small IT/BPO firms away from India.
STPs provide basic infrastructural support and state of art plug & play facilities to new firms. These facilities allow new and smaller firms to set up operations at minimal investments. However, owing to high costs of metros, deficient physical infrastructure likes power, transport and security many units registered with STPs have been de-bonded. Moreover, the income tax benefit on exports by STP units was withdrawn with effective from April 2011. At the same time the alternative policy of IT-ITES SEZs announced by the government of India has not been fully operational.
In view of the above, there is a strong need to widen the STPs network further to semi-urban and rural areas. This would address most of the immediate concerns of the Indian IT/ITeS sector and ensures the proliferation and growth of the industry further. The government, in view of the criticality of the issue, needs to act immediately. Top
Grant infrastructure status to airports, classify jet fuel as declared goods: ASSOCHAM
New Delhi, January 09, 2012: Industry body ASSOCHAM today called for granting infrastructure status to airports besides classifying aviation turbine fuel (ATF) and cement as declared goods to bring a uniform tariff structure across the country.
This will facilitate emergence of airports as hubs and lower tariffs for passengers. The Indian aviation industry is being adversely affected as tax rates on ATF vary substantially from state to state.
“ATF comprises nearly one-third of an airline’s operating cost and hence may be brought under the ambit of Goods and Services Tax (GST),” said Mr D.S. Rawat, secretary general of The Associated Chambers of Commerce and Industry of India (ASSOCHAM), in proposals for the Union Budget 2012-13.
He also called for clarity on applicability of GST for imports meant for warehousing to be sold at duty free shops in airports. Emergence of low cost carriers has led to a boom in air travel and the number of passengers at Indian airports is expected to grow to 450 million by 2020.
Thus huge investments are required to develop, modernise and expand the airport infrastructure. Tax holidays for initial years, concession tariff for certain services like electricity use and moderate rates of customs duty, excise duty, value added tax and sales tax will attract investments.
There should be exemption from customs duties on all security systems like X-ray baggage inspection systems, explosive detectors, robots scanning bombs or suspected baggage, parameter security intrusion systems, hydraulic bollards, boom barriers and cameras for closed circuit televisions.
Under the Foreign Trade Policy, airport operators are eligible for Served From India Scheme (SFIS) scrips and development projects are eligible under Project Import benefits. The customs Electronic Data Interchange system may be amended to allow use of SFIS scrips for payment of duties.
To promote tourism, Mr Rawat called for encouraging purchase from Indian duty free shops by increasing duty free allowances for incoming international passengers from Rs 25,000 to Rs 50,000.
He said there should be exemption or deferment of minimum alternate tax (MAT) applicability by at least five years of commercial operations of infrastructure projects of national interest like airports. Or else, the MAT rate should be halved to 10 per cent of book profits. Top
Toy market to reach Rs 13K crore by 2015: ASSOCHAM
New Delhi, January 08, 2012: Toy market to Growing at a compounded annual growth rate (CAGR) of about 20 per cent the Indian toy market is likely to reach Rs 13,000 crore by 2015, apex industry body ASSOCHAM said today.
The domestic toy market is currently poised at about Rs 7,500 crore according to the as study titled ‘Toy Industry in India: The Way Forward’ released by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“The Indian toy industry caters to nearly four crore kids in the age group of 12 years across the country but domestically manufactured toys account for a meagre 15 per cent of the market and the rest of the market is flooded with imported toys from countries like China, the United States (US), the UK, Korea and Malaysia among others,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the findings of the study.
“Dogged by lack of advertising, distribution, innovation, infrastructure, marketing, usage of technology and abundance of imported products the domestic toy industry must be provided with credit and marketing assistance by the government,” said Mr Rawat.
The toy industry provides a wide range of products like board games, collectibles, construction toys, educational games, electronic toys, mechanical toys, puzzles, stuffed toys and toy vehicles, said the ASSOCHAM study.
The toy industry in India is highly fragmented, unorganised and is predominantly dominated by micro, small and medium scale manufacturers. Besides, there are nearly 2,000 units in the organised sector.
“Centres like Ahmedabad, Bangalore, Delhi, Hyderabad, Kolkata and Pune are fast emerging as toy manufacturing hubs,” said Mr Rawat.
The toy industry employs nearly 25 lakh people both in the organised and unorganised sector. Nearly 70 per cent of toy market in India is unorganised.
Small toy shops rule the unorganised toy industry while multi-brand toy outlets and branded toy shops in malls displaying top quality toys from brands like FisherPrice, Funskool, Hamleys, Hasbro International, Lego, Majorette, Mattel, NICI and others catering to the middle class and above.
Many of these companies have also jumped on the e-commerce band wagon and are retailing their toys and games online, but the domestic toy manufacturers are yet to take an initiative in this regard as most of them are still dependent upon traditional toy shops spread across cities and towns.
Emergence of video games has dented the toy business across the world as there is an evident shift from traditional toys and games to video games. As a result, international toy manufacturers have also expanded their operations in the video game segment.
ASSOCHAM has called for providing funds for skill development, subsidies and setting up of dedicated research centres and manufacturing facilities to enhance the skills of the toy manufacturers in India.
“Besides, parents must inculcate among kids as to how traditional toys and games play a significant role in learning about life,” said Mr Rawat.Rs 13K crore by 2015: ASSOCHAM. Top
ASSOCHAM welcomes duty hike on iron ore exports
New Delhi, January 06, 2012: The government’s decision to hike duty on iron ore exports from five to 30 per cent is a step in the right direction which will put emphasis on value addition within the country to meet growing demand of steel, industry body ASSOCHAM said today.
India exported iron ore worth 4.7 billion dollars in 2010-11 and imported finished steel worth 11 billion dollars, thus contributing negatively to widening trade deficit and draining foreign exchange reserves. Conservation of iron ore is in the national interest as reserves may run out rapidly due to projected growth of the economy, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“We have always advocated a complete ban on iron ore exports. However, discouraging them through fiscal measures is an appropriate solution to utilise large mining, infrastructure and port capacities created for iron ore,” said secretary general D.S. Rawat.
A nine per cent growth in GDP will create demand for 113 million tonnes of steel and 206 million tonnes of iron ore by 2016-17 as the country embarks on several infrastructure projects. The current production of iron ore is 208 million tonnes of which 98 million tonnes is exported.
“It is imperative that India conserves its iron ore resources to safeguard long-term sustainability of the steel industry,” said Mr Rawat adding the crackdown on illegal mining by the Supreme Court has led to severe shortage in availability of iron ore to the domestic steel industry.
China had imposed a duty of 40 per cent on exports of coal and coke for value addition within the country. This led to creation of the world’s largest steel manufacturing capacity and accelerated China’s GDP growth, he said. Top
