TOI reported that the government could reduce nearly by half the import duty levied on heavy and light equipment used for mining coal in line with the renewed focus on raising output of the fuel which accounts for approximately 60% of domestic energy supplies.
Sources said the issue dominated coal minister Mr Sriprakash Jaiswal's budget discussions with Mr Pranab Mukherjee finance minister on last Tuesday, another being disinvestment of 5% to 10% government equity in state owned monopoly Coal India Limited. Currently, earth moving equipment attract 10% import levy and small mining items like shovels etc 7.5%. The proposal is to bring them down to 3%.
For the record though, after his meeting with Mr Mukherjee, Mr Jaiswal restricted himself to commenting only on the disinvestment proposal. He said “We are working on a proposal to disinvest 5% to 10% stake in Coal India. I have informed the finance minister about it but we have not given it in writing.”
A reduction in import duty will benefit Coal India the most. Subsequently, it will also benefit power producers such as NTPC and Anil Ambani's Reliance Power which have major coal mining plans for captive use. Lower import duty will increase the rate at which these equipment are pressed into service for raising output.
Source : TOI