September 08, 2008

Indian steel ministry justifies steel price roll back

PTI reported that, brushing aside criticism for forcing steel majors to reduce prices of steel, Indian government has justified its action saying that it had become necessary as the companies were making disproportionate profits.

Mr Ram Vilas Paswan union steel minister said that "It was absolutely necessary as the firms were making disproportionate profits. The increasing prices of steel were impacting consumers and the government had to fulfill its responsibility."

Mr Paswan added that "You see, if prices are rising, people look forward to government only and not the industry. The steel companies are earning huge profits. Only some part of their gains is affected by this move and nothing else happened. Steel companies told me that the cost of raw material has increased. But in reality, they had increased their margins disproportionately. We only intervene when it becomes absolutely necessary."

Last week, union steel ministry had successfully got the steel industry to roll back the prices of steel that have risen sharply in the recent months, by INR 500 to INR 1,000 per tonne, inviting criticism from economists and sections of media.