Govt hikes import duty on ghee, butter to 40%

Government on Monday increased import duty on ghee, butter and butter oil by 10 per cent to 40 per cent and promised to take more such actions to safeguard the interest of domestic producers in wake of a glut in the global commodity markets.

“We have taken a decision that starting from today, for a period of six months, we will be increasing the import duty on ghee, butter and butter oil from the present rate of 30 per cent to 40 per cent. So this will continue till March 2016,” Revenue Secretary Hasmukh Adhia told reporters here.

The decision was taken based on the request from milk producers seeking duty protection as there was a big drop in the prices of ghee, butter and butter oil in the international market. Emphasising that more such actions could be taken to protect <g data-gr-id="69">interest</g> of domestic manufacturers, he said, adding there is a need to protect <g data-gr-id="70">interest</g> of <g data-gr-id="71">domestic</g> industry.

“We are very cautious of the fact that the domestic industry may need some protection looking at the global situation and we are open to the idea, but the industry has to approach the respective authority with full justification of their demand,” he said.

Providing effective protection to domestic industry and even to domestic farm sector has become big issue in global meltdown because there is glut of supply of the certain commodities, he said, adding, “now India has to take care of local industry and farm.” <g data-gr-id="50">Adhia</g> asked industry to approach right authorities with proper justification with regard to raising duties. “They (industry) should effectively use the mechanism of <g data-gr-id="62">safeguard</g> as well as anti-dumping which is there in the country. It is not for us to take <g data-gr-id="51">suo</g> <g data-gr-id="52">motu</g> action, the industry has to make <g data-gr-id="60">case</g> for safeguard and anti-dumping,” he said.

Based on <g data-gr-id="66">recommendation</g> of Directorate General of Safeguards and Directorate General of Anti-Dumping and Allied Duties, the Department of Revenue take action, he said. Recently the government imposed 20 per cent safeguard duty on hot rolled to put a curb on <g data-gr-id="65">import</g> of cheaper steel from abroad.

On <g data-gr-id="53">increase</g> in import duty on ghee and butter, National Dairy Development Board Chairman T Nanda Kumar said it is a “welcome step and in <g data-gr-id="54">right</g> direction as it will help the domestic farmers”. At the same time, there will not be any significant impact on retail prices, he added.

With supportive policies in place, <g data-gr-id="47">Watal</g> said, “India is emerging as a strong growth driver for the world economy, capable of sustaining economic growth through its own momentum”. Based on a foundation of <g data-gr-id="48">macro-economic</g> stability, sizable foreign exchange reserves, and on creating the conditions for investment opportunities, the country is now better placed to handle external shocks. To support the economy, he said, RBI has already announced a 50 basis points cut in the policy rate, bringing <g data-gr-id="67" style="color: #3b3b3b; font-size: 11px;">cumulative</g> support of monetary policy to 125 basis points this year.

“This should boost confidence and investment, and help shore up corporate balance sheets. The government will play its part to ensure the benefits of <g data-gr-id="56">accommodative</g> monetary policy are transmitted to the economy at large,” he added.

As regards expenditure management, <g data-gr-id="49">Watal</g> said that despite doubts being expressed by experts, government has been able to allocate 10 per cent more resources to the states and increase plan expenditure by 30 per cent so far in the current fiscal while adhering to the fiscal glide path.

The government, he further said, would move ahead with its subsidy rationalisation programme and <g data-gr-id="57">was</g> look forward to <g data-gr-id="58"><g data-gr-id="42">the the</g></g> report of expenditure management commission to take more initiatives. Headed by former RBI Governor Bimal Jalan, the commission is expected to submit its report by December end.