Finance Minister P Chidambaram, on Tuesday, took the unusual step of thanking the steel producers for having slashed the prices of their products, singling out Tata Steel for having taken the lead.

In a statement, the minister said the steel industry had displayed commendable sense of responsibility.

"I convey my thanks to the industry for these announcements", he added.

The statement said the government was happy that the main steel producers have announced voluntary reductions in the price following the substantial duty cuts in the Customs duties on steel, made by the finance ministry last week.

Following the duty cuts, leading steel producers led by Tisco reduced prices. This included SAIL, Essar, Ispat and Jindal, who announced price reductions varying from Rs 500 per tonne to Rs1,000 per tonne on select products. Tisco has said it will hold the current prices till March 2005.

Downstream industries including automobiles and construction would heave a sigh of relief following the price cuts.

The ministry slashed import duty from ten per cent to five per cent on non-alloy steel (other than seconds and defective), from 15 per cent to five per cent on ships for breaking and from five per cent to zero on melting scrap of iron and steel (other than stainless steel or heat resisting steel).

Chidambaram said, "I am particularly happy that Tata Steel took the lead and announced a substantial price reduction of Rs.2000 per tonne on main products".

He added "It is a happy coincidence that the reduction was announced on the eve of the centenary of the late J R D Tata whom we remember today with warmth and pride".

The duty cuts made by the finance minister are in line with the government's announcement that it would bring about such changes in order to control inflation.