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Steel may be back under Essential Commodities Act

NEW DELHI: In an attempt to hold the price line, the government is toying with the idea of bringing steel back under the Essential Commodities Act as prices of the core construction material have soared by about Rs.7,000 a tonne within a three-month period.

Even as primary producers “voluntarily” reduced prices by about Rs.2,000 a tonne at the “instance” of the Steel Ministry following the rate of inflation galloping to a three-year high at seven per cent, the stringent measure were considered earlier to ward off another bout of price hike by the steel majors in keeping with the rising trend in global markets.

Among various fiscal and non-fiscal measures suggested in a letter to Prime Minister Manmohan Singh, Steel Minister Ram Vilas Paswan has also proposed the inclusion of steel in the list of items under the Essential Commodities Act to help keep a firm check on steel prices.

“In the three-month period since December 2007, steel prices have risen by 20-24 per cent... possibility of setting up a regulatory mechanism for steel and its inputs and re-classifying steel as an essential commodity may be considered by the government,” he said in his letter to Dr. Singh.

However, the chances of the proposal being implemented immediately appears to have receded for some time at least, mainly because the steel giants decided to roll back prices after a meeting with top officials of the Steel Ministry.

Already, to ensure adequate domestic supplies of steel, the government has withdrawn the export incentives that were available to producers by way of the Duty Entitlement Pass Book (DEPB) scheme.

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