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Press Releases 2006:
1) Pre-Budget
Memorandum 2006:
Government Intervention Urged
to Enable Steel Wire Industry to Survive and
Grow
for Generation of Employment & Becoming a
Global Player
In its Pre-Budget memorandum, Steel Wire
Manufacturers Association of India (SWMAI), the Apex National Body
of Steel Wire and Wire Rope Industry, accounting for production of 1.6
million tonnes of steel wires per annum; generation of employment
opportunities for large number of workers and also accountable for earning
handsome amount of foreign exchange by exporting its products, has strongly
urged Government of India to intervene to solve its specific problems.
The Indian wire industry
has been largely driven by the growth of the infrastructure and automobile
sector. It is seen that this industry is growing about 5-7% during last two
years. In line with the National Steel Policy, the availability of steel wire
rods will increase with the expansion plans of the existing units and new
plants coming in with new capacities. It is evident from the fact that the
growth in economy will accelerate the consumption of steel within the country.
The demand of wires will also increase in leaps and bounds in the years to
come. The per capita consumption of wire out of per capita consumption of
steel is only 5%. However, if pace of development picks up, it may increase to
7 – 8% in the domestic market.
Therefore, it is for the wire
drawing industry to meet the challenges both in the domestic and the world by
taking full advantage of their capacities, updating the technology, going for
more value added products, reduction in cost and go-getting for continuous
improvement, looking for export opportunities with innovation and creativity.
But, at this juncture, government intervention is indispensable.
SWMAI has made the following
suggestions for consideration of the Government:
i) Discourage Import of Steel Wires & Wire
Ropes:
It is admitted in the
National Steel Policy 2005 that China’s emergence as a net exporter of
Steel and dumping policy taken by competitor countries are major obstacles to
Indian Steel Industry. The Steel Wire Industry in India is also getting
adversely affected due to cheaper imports of ACSR core and
PC wires from Nepal. Many international wire
manufacturers are routing their products to India through Nepal using the MFN
treaty between India & Nepal. Chinese
wire rope prices are upto 30% less compared to Indian prices. In case of wire
the same is Rs. 3,000 / 4,000 PMT less.
The imports do not suffer the Sales Tax/ VAT, to the user.
According to statistics, net
import of steel wires and wire ropes between April- September 2005, has
already crossed 21090 tonnes, compared to tonnes
in April 2004 - March 2005. It is now safe to say that the volume of import
would cross 40,000 tonnes in April 2005-March 2006 period, depicting a
27 per cent increase over the last fiscal. This could wreak havoc on
the domestic steel wire utilities.
At this juncture,
SWMAI strongly urges to raise the import duty on Steel Wires and Wire Ropes to
15 per cent. Further steel wire be treated as a manufactured item, other than
Wire Rod, which is a form of basic steel.
ii) Encourage Export
of Steel Wires & Wire Ropes:
There are no
specific export incentives to the Steel Wire & Wire Rope sector other
than those, which are generally available to exports under Exim Policy. Steel
Wire Industry in India, by and large, is quite competitive in their production
cost compared to other developed and developing countries.
Thus, to carry on the
pace of growth of the Industry and to maintain its viability, suitable export
incentive schemes should be introduced.
iii) Resolve the
pending Central Excise issue, raised due to withdrawal of the CENVAT credit
availed by wire drawing units during the period from 29/05/03 to 08/07/04 by
taking necessary steps for an early consideration of Clause 36 of the
Taxation Laws (Amendment Bill), 2005, by the Parliament:
Steel Wire Industry had been put into great
difficulties, arising out of the Order of the Supreme Court to the effect that
drawing of wires from wire rods did not amount to manufacture.
In the Budget for 2004-05,
Govt. have clearly distinguished Steel Wires from Wire Rods by bringing the
wire drawing activity from Wire Rod, under the purview of “Manufacture”,
by inserting a section note to this effect in Section XV.
Unfortunately, however, for the interim period, i.e., for 29.05.2003 to
08.07.2004, industries were harassed by the Central Excise Department and
there was no uniformity in their stands throughout the Country.
On various representations made by SWMAI,
Ministry of Finance has now proposed retrospective amendment in Rule 16 of the
Central Excise Rules, 2002 by the Taxation Laws (Amendment) Bill, 2005 (Bill
No. 74 of 2005), which was introduced in the LOK SABHA on 12/05/05. The said
amendment shall be effective retrospectively for the period commencing on and
from 29/05/03 and ending with 08/07/04. The said Bill was already referred to
the Standing Committee on Finance and the same is now pending for
consideration of the Parliament.
SWAMI urges that this bill, which is pending,
must be taken up in the Budget session for consideration.
Kolkata
[TIRTHANKAR BANERJEE]
16th February,
2006 Secretary
2) Budget
Reaction 2006-07:
Union Budget: 2006-2007
Immediate reaction of Mr. Mahesh Poddar,
Chairman
Steel Wire Manufacturers Association of India
(SWMAI)
Steel Wire Manufacturers Association of India
(SWMAI), the Apex National Body of
Steel Wire and Wire Rope Industry, has expressed their views on Union
Budget: 2006-2007, presented today in Parliament, by Hon’ble Minister of
Finance, Shri P. Chidambaram.
In his reaction, Mr. Mahesh Poddar,
Chairman, SWMAI, said that reduction in Customs Duty on Alloy Steel
is a good step. This would eradicate the difference between Alloy Steel
and Steel. This will also reduce the litigation, regarding the
particular consignment, falls to the manufacturers due to the present
difference between Alloy Steel and Steel.
Mr. Poddar
has pointed out, with great distress, that though it was the demand of Steel
Wire & Wire Rope Industry that import duty on wire rods should be
reduced where as the same on Wires & Wire Ropes be increased, but no
such steps have been taken by the Government in the Budget.
Mr. Poddar
also strongly urged that the decision regarding reduction of Central Sales Tax
(CST) should be taken within two weeks and that is necessary for increase in
internal trade. In any case, it should be made effective from
1st April, 2006.
Kolkata
[TIRTHANKAR BANERJEE]
28th
February,
2006 Secretary
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