ET reported that the ministry of heavy industry has favored slashing the 5% Customs duty on steel and steel products to boost capital goods industry, as steel is the primary input for manufacturing capital goods.
The report cited an official in the ministry as saying that “The ministry is concerned about a slowdown in the capital goods industry. The sector’s output showed a dismal growth of 3.1% in October 2008 as compared to 20.9% in the same period last year.”
The official said that the ministry of finance had asked the heavy industry ministry to prepare a proposal to boost the capital goods sector. He said that “We plan to submit it to the finance ministry in two weeks.”
The 5% duty was re imposed in November to protect domestic steel firms from cheaper imports.
Source : ET