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PM urged to save steel melting industry.

PM Urged to Save Steel Melting Industry

Chairman, Pakistan Steel Melters Association (PSMA), Masud Gul has said that the private sector steel melting industry is in a deep ever crisis for the last two years due to serious anomalies in the duty structure for steel. These conditions were deliberately created by the previous government as part of the overall plan to financially cripple and gain ascendancy over their ace political rivals who were in the steel business, without realizing the adverse consequences on rest of the small steel melting units with no political interest whatsoever.

The political adversary for which the whole planning was done survived because of their multiple business concerns, but the rest of the industry comprising over 140 units spread all over Pakistan kept struggling under hostile conditions. Today over 80 per cent of the installed capacity is lying idle and rest of the units are also bound to close down very soon. The government is losing lakhs of rupees in revenue everyday.

He said it was hoped that the new government which was well aware of the problems would take appropriate measures to do justice with the industry and bring an immediate end to their suffering but the situation remains unchanged. The government has failed to give due importance and solve the genuine problems of the industry so far. The Prime Minister's policy of bringing an industrial boom by establishing new industries is meaningless if the industries which are already established remain out of operation. The association has appealed to the Prime Minister to personally intervene immediately and save the steel industry from further damage, failing which the industry will have no option but to close down completely for indefinite period.

Following immediate measures are suggested:

a) Raw material (iron and steel

scrap/waste) be levied 10 per

cent custom duty and 12.5 per

cent sales tax. b) Public and private sectors be

treated equally for levy of

various taxes/duties. c) Import of remeltable scrap be

restricted to shredded, bundled

and sponge iron only. All other

types including HMS-1 be

covered under one head i.e.

"rerollable scrap". d) High rate of duty be levied on

rerollable scrap to discourage

import and protect the local steel

industry including Pakistan

Steel Mill. e) The differential of Rs. 1,100 per

ton between duties on steel

melting industry and ship breaking,

in favour of steel melting

industry be revived. The differential

was mutually agreed and

submitted in writing to the

government in 1988. f) Exemption of taxes/duties on

raw material, finished products

and 50 per cent concessionary

rate of electricity for Gadoon

Amazai be withdrawn.
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Title Annotation:Business Opinion; Prime Minister's policy on steel melting industry
Publication:Economic Review
Date:Feb 1, 1991
Previous Article:Shipbreaking industry shows signs of revival.
Next Article:Freedom given to Pak Steel in pricing of products slated.

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