Protect Steel Industry, demands Apex Chamber of Commerce & Industry (Punjab)

Shots off a letter to Union FM, PM & Others
Ludhiana, March 29, 2016: Apex Chamber of Commerce and Industry (Punjab) president P.D.Sharma has written a letter to the Union Finance Minister Arun Jaitley regarding Protecting Steel Industry. Copies of this letter have also been sent to the Prime Minister, Narendra Modi, Minister of State for Commerce & Industry, Minister of Steel and Cabinet Secretary & Principal Secretary to PMO.
The letter reads: “Government is trying to protect the main steel producers of this country by hiking import duty by 5% (Aug 2015) imposing minimum import price on 173 steel products, levying 20% provisional safeguard duty on hot roll coil and imposed antidumping duty on import of hot roll coil steel.
These steps were taken only to protect the few main steel producers at the cost of steel users across board. Even secondary steel producers have also been overlooked. This was done primarily to protect the banks who have very large exposure to main steel producers of this country. In this regard few facts are eye openers.
Some four years back government empowered the chairmen of the public sector banks to lend up to Rs. 400 crores of their own. Earlier this limit was Rs. 100 crores.
It is also in the public knowledge that steel companies have paid much more attention to other activities and less to the core functions. This diversion of attention and funds is against the banking norms in general.
Banks are supposed to scan the borrowers’ accounts minutely in order to avoid diversions.
The above reasons and others are mainly responsible for the stressed assets of steel companies. It is also a fact that some of these companies are even faulting on External Commercial Borrowing (ECB) which is a very serious matter.
Government has extended the protective cover to steel companies. This will hurt the vital components of our economy. Even major programmes of government like “Make in India” will also be hurt.
MSMEs’ are the back bone of our economy both in terms of production and creation of jobs. Higher steel prices due to protection will adversely affect this vulnerable sector.
Government has overlooked F.T.A’s with other countries like Japan, South Korea and others by protecting the steel producers. The MSMEs’ and other manufactures are still exposed to duty free imports from such countries. Thus they are dooming.
It is an irony that steel users will get costlier steel and face competition from other countries with F.T.A’s, an unviable proposition.
It is, therefore, urged that content of protection to few steel producers may be substantially reduced to safeguard the entire steel using industry of the country.
Our steel producers have a history of fixing rates arbitrarily.
It is also desired that the bank portfolios of steel companies may also be inspected critically.”