The Associated Chambers of Commerce & Industry of India (ASSOCHAM) – apex Industry body, has suggested the Union Government to constitute an appropriate authority either at the Central or state level to fix the ceiling on road freight rates and breaking local monopolies.
“Transporters charge exorbitant rates for movement of iron ore and other raw materials from mines and ports to steel plants, besides they also prevent free competition through their dominating presence in local areas,” said ASSOCHAM highlighting the double whammy being faced by the domestic steel sector.
It also urged the Steel Ministry to bring down rate of royalty on iron ore to reduce the cost of raw materials for steel plants.
“About 15% royalty rate on iron ore together with District Mineral Foundation (DMF) at 30% of royalty translates into royalty burden on end user of 19.5% of iron ore cost,” it noted.
The apex chamber requested to reduce the DMF rate for new mines from 10% for captive consumption of iron ore.
Considering that higher transport costs result in higher costs of production of steel in India, there is an urgent need to bring down freight tariff rates by up to 25% across all raw material and steel products to gain competitive edge.
~Sourced
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