A V Dharmakrishnan, Vice-President (Finance) said that the delicensing of the coal sector was a welcome move and would go a long way in improving the domestic coal industry. More washeries can be set up and the quality will show some improvement. Thrust to housing and roads would boost long term demand for cement. He also said that restriction of modvat to five per cent would not affect the industry much as the main raw material limestone does not suffer excise duty. Excise duty on bags are not very significant.

T V Swaminathan, General Manager (operations) opined that delicensing of coal sector would mean that companies can own private mines. Cost of mining ismuch less compared to PSUs especially with foreign technological inputs. Delicensing will not have any significant impact on domestic coal prices as most grades of coal are deregularised. Government has not curtailed expenditure and that is a good sign. Repealing of ULCRA, fillip given to housing and the related incentives should push up demand.

L Muthukrishnan, Vice-President (Finance) said that the demand would improve, cost of production would decline thereby improving the bottomline of the companies in the industry. The only negative feature is the restriction of modavt to five per cent which could add up to the cost.

The exemption from the eight per cent import duty for imports meant for resale is likely to be taken advantage by the cement companies. As the local sales tax on coal is only four per cent, cement companies are likely to import coal through some other company and then purchase from it to avoidpaying a higher duty.