INDIA'S STEEL INDUSTRY FEELS LET DOWN BY BUDGET.

NEW DELHI, March 3 Asia Pulse - The steel industry has expressed disappointment over the Budget 2008-09, saying it did not address their long-standing demand for raising export duty on iron ore to ensure the availability of the mineral for domestic steel manufacturers.

Describing the Budget as marginally positive for the steel sector, Tata Steel (BSE:500470) Managing Director B Muthuraman said "The Honourable Finance Minister has referred to Steel Industry in India as oligopolistic, but I wish to mention that total steel production in India is less than half of the largest steel producer in the world...

"To meet future steel demand of a growing nation like India, we need new capacities of global scale... To facilitate setting up of new investments, the government needs to provide a launching pad for investment in steel production by removing existing hurdles." Reduction in the peak excise duty and cutting duties on project import would have a positive impact on the steel and other capital-oriented industries, he said pointing out that slashing the customs duty on steel-melting scrap would not have any impact on Tata Steel.

Reacting to the budget, Indian Steel Alliance President Moosa Raza said the steel industry was disappointed as the Finance Minister did not address their demand for the increasing export duty of the mineral, which is a key input for steel making.

"... The Steel industry is disappointed that its request for taking physical and fiscal measures for the conservation of iron ore resources for the benefit of the country has been overlooked. This is essential as the steel industry apprehends that iron ore resources in India may not last until 2030 if ore exports continue at the current rate," he pointed out.