With inflation coming in at a scorching 7.4 per cent for week ended March 29, the ban on steel exports will be on top of the agenda when the cabinet committee on prices meets today, reports CNBC-TV18.

The committee will recommend various steps to the government, all aimed at curbing rising prices. These options are likely to include a reduction in excise duty on steel, and an increase in the duty on iron-ore exports. Inflation too will be discussed in the parliament.

With inflation raging at 7.41 per cent, it's very likely that the cabinet committee on prices, may be convened later in the day. There's no official confirmation as of now, but it's very likely that a meeting might happen, sooner than later, the focus of that meeting will be on how to curb the run away steel prices.

Steel has a weightage of about 3.41 per ecnt in the wholesale price index, but the problem with the run away steel prices is that it has a spiraling effects on other sectors like automotive, auto components and the construction industries, which further stokes inflation.

A slew of measures are on the table. Firstly scrapping the import duty on steel and making it 0% from the existing 5%, secondly reducing excise duty on steel from 14% to 8%, and  restoring the re-classification of freight on steel, which made steel a costly item as far as rail freight is concerned.

But a controversial proposal of replacing the specific duty on iron ore from specific to ad valorem duty on exports on iron ore is something that even the government is divided on. Commerce Minister Kamal Nath told CNBC-TV18, that there is no point in leaving an ad valorem export duty on iron ore, because there is an abundance of iron ore in the country and that such a levy would really not make a difference.
 
The urgency for the government in trying to curb runaway steel prices can be understood from the fact that the finance minister said  from Washington that he would do anything within his power and take any fiscal step in order to ensure that steel and other sectoral prices, which are going upwards, can be corrected even ''If we have to live with lesser growth''.

The government has come to these drastic decisions given the fact that at 7.41 per cent, inflation today has assumed a dangerous proportion threatening the growth prospects of the Indian economy. This is one cabinet committee on prices, which has to be watched and one can expect drastic steps from a government in election mode.