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Thursday, April 05, 2007

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Govt fires another salvo at cement makers

In yet another twist to the ongoing spat between the Government and the cement manufacturers, the Centre announced that it was doing away with 16% Countervailing Duty (CVD) and 4% Special Additional Duty (SAD) on Portland Cement. "The Government expects that the cement manufacturers, in the larger interests of consumers and for checking inflation, will take appropriate measures for moderating cement prices,'' the Finance Ministry said in a statement. The move is likely to make imported cement cheaper than domestic cement by Rs25-35 per bag. At present, imported cement is slightly expensive than local cement. Average cement prices increased to Rs220 per 50-kg bag in March from Rs165 in January and Rs209 in February, the Government said. The Government, with a view to keep prices of cement in check, had fully exempted basic customs duty on portland cement in January. The cement industry was requested to moderate prices in the interest of the consumer. However, the industry is of the view that prevailing high prices are a consequence of a demand-supply mismatch. "It is expected that the present move will improve supply situation in the country," the Finance Ministry said. The Government has already invited cement manufacturers to come forward with proposals to moderate the price of cement. The move could be aimed at ensuring that cement manufacturers pass on the benefits in case the Government rolls back the differential excise duty structure.

Govt won't buy land for SEZs
Desperate to clean up its public image post Nandigram violence, the Government on Thursday announced that it will not get involved in land acquisition for Special Economic Zones (SEZs) and will the shrink the size of such zones to a maximum of 5,000 hectares. The Empowered Group of Ministers (EGoM) on SEZ also cleared 83 SEZs with the requisite development land besides increasing the processing area of the SEZs to 50% of the land size. "The decision will be applicable to all SEZs including those which have already been notified," Commerce and Industry Minister Kamal Nath told reporters after the meeting of the EGoM in New Delhi today. In its last meeting, on January 22, the high-powered ministerial panel on SEZ had put a freeze on fresh approvals and notification amid rising protests against the Government's policy on land acquisition for such enclaves.

In the face of protests by farmers in some parts of the country, the EGoM decided that there was no need for compulsory acquisition of land for SEZs by the states, leaving it to private developers to deal with the land owners. Also, the states would be empowered to reduce the size of SEZs below the 5,000 hectare limit set by the EGoM. Under the new Relief and Rehabilitation Policy, which would be finalised soon, at least one member of the displaced family would have to be employed in the SEZ, Commerce Minister said. This would be in addition to the compensation paid to the land owners, he said. Of the 234 SEZs with formal approvals, 63 have already been notified, while 83 more were cleared today for notification. The Board of Approvals for SEZs will now take up 162 SEZs with in-principle approval and 140 pending applications.