IN A bid to curb the pricing freedom of steel manufacturers, the government is considering a price band for steel products, which would prevent price hikes beyond a prescribed ceiling. Going against the grain of economic liberalisation, the proposal is likely to be discussed at a meeting of the committee of secretaries (CoS) next week. The price band plan would institutionalise government control over steel pricing, setting the clock back to the licence raj days. Steel is a completely decontrolled sector now, with companies having full freedom to decide on prices. "Rising steel prices and their impact on inflation are a cause for major concern for the government. Prices may rise again next month after the self-imposed price moratorium of steel companies comes to an end. While the government may ask companies to hold prices for a few more months, the band is being considered for the next stage to reduce price volatility in a rising steel market,' government sources said. It is understood that the government may prescribe a level up to which steel companies could increase prices on their own. For increasing prices beyond that band, companies would have to obtain government approval. In a rising market where international steel prices are Rs 15,000-20,000 higher than domestic rates, the new mechanism would allow companies to raise steel prices only up to a certain limit. This is meant to prevent any windfall rise in steel prices that could come to the rescue of the government's efforts to check inflation. Sources said the CoS meeting next week would be followed up with a meeting of steel ministry officials with steelmakers. Even though steel companies cite excessive rise in input costs and global market scenario as the prime reasons for the rise in prices, the government feels that domestic prices could remain soft for some more time. Steel secretary RS Pandey has gone on record to suggest that EBIDTA margins of some steel companies have remained over 20% as late as June this year, suggesting that all steelmakers are not being squeezed. The margins were 15-40% in 2007-08. "As long as inflation remains high, the government will certainly deliberate to do what is right,' Mr Pandey said. Steel and steel products contribute to 21% of inflation.