Budget may look into ‘inverted’ duty structure in select sectors

The Finance Ministry is likely to address in the Budget the inverted duty structure existing in certain sectors such as marine products, chemicals and solar components. However, intervention may be limited to sectors where farm goods are not involved. In an inverted duty structure the duty on raw materials is higher than the duty on the finished goods. Such a situation makes the domestic manufacturing industry less competitive.With the manufacturing sector contracting by 0.7 per cent in December, such a move is imperative. Overall industrial production registered a growth of just 0.7 per cent in December. The Commerce Department has submitted a list of products for the Finance Ministry’s consideration where import duty on inputs is higher than that on finished goods and need to be brought down. A number of such items are, however, agricultural and are politically sensitive.