The followings policy initiatives have been taken by the Government after the liberalization to enhance the availability of steel in the country
- Removing the steel sector from the list of industries reserved for public sector and opened for private sector also.
- Exempting it from compulsory licensing.
- Imports of foreign technology as well as foreign direct investment are now freely permitted up to certain limits under an automatic route.
- As a facilitator, the Government provides fiscal and other policy measures for the growth of steel sector. Currently, basic excise duty for steel is set at 14% and there is no export duty on steel items. The government has also imposed export duty of 30% on all forms of iron ore except low grade (below Fe 58%) iron ore lump & fines. Further iron ore pellets have nil export duty.
Other Government Initiatives:
- For ensuring raw material availability, the Government had issued Mines and Minerals (Development and Regulation) Amendment Act, 2015 & rules there-under which provides for allocation of iron ore to ‘specified end use’ to bring transparency in allocation of raw materials. This would also allow transfer of captive mining leases, granted otherwise than through auction, during mergers and acquisitions of companies and facilitate ease of doing business for companies to improve profitability and decrease costs of the companies' dependent on supply of mineral ore from captive leases. The transfer provisions will also facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.
- A Project Monitoring Group (PMG) has been constituted under the Cabinet Secretariat to fast track various clearances/resolution of issues related to investments of Rs 1,000 crore (US$ 152 million) or more.
- For reducing the stress in the steel sector, RBI has extended 5:25 scheme in July 2015, whereby longer amortization period for loans to projects in infrastructure and core industries sectors, say 25 years, based on the economic life or concession period of the project, with periodic re-financing, say every 5 years, is allowed.
- For ensuring quality of steel, 91 Indian Standards for steel have been brought under quality control orders issued by the Government. This will help in keeping away the production of inferior quality of steel in the country.
- Ministry of Steel has constituted an Investment Facilitation Cell to provide necessary information pertaining to steel sector, such as, policies of the Ministries, various incentive schemes and opportunities available to make it convenient for investors to take investment decisions.