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[Ferro-Alloys.com] The increased capital expenditure for infrastructure projects in Union Budget 2021-22 will push demand for steel in the country, industry body ISA said one day.
To augment the country's infrastructure, the Budget proposed significant enhancement in capital expenditure to Rs 5.54 lakh crore for the next fiscal, besides creating institutional structures and giving a big thrust to monetising assets to achieve the goals of the National Infrastructure Pipeline (NIP).
In her Budget speech for the financial year 2021-22, Finance Minister Nirmala Sitharaman had also announced to set up a Development Financial Institution (DFI).
The minister said that a sum of Rs 20,000 crore has been provisioned in the Budget to capitalise the DFI.
"We are happy at the proposals related to increased construction of roads and highways as well as the proposed introduction of a bill to set up an institution for financing infrastructure and development. Enhanced investments in the infrastructure and related segments will create a demand spike for steel," Indian Steel Association (ISA) said in a statement.
Stepped up budgetary allocations for railways, metro services, development of more airports, the Jal Jeevan Mission, urban and the rural infrastructure development in the Budget will also help generation job opportunities besides creating demand for steel, ISA said.
It is the apex industry body representing the players of the Indian steel industry.
Meanwhile, Cold Rolled Steel Manufacturers Association of India (CORSMA), which represents the secondary or non-integrated steel players in the country, also welcomed the reliefs announced with respect to the steel sector in the Budget on Monday.
In a letter to the Steel Minister Dharmendra Pradhan on Wednesday, CORSMA Executive Director N K Sood said: "We appreciate that due consideration has been given to the industry's concerns as projected by CORSMA. Two of our proposals relating to the reduction of duty on HR (hot rolled) coil and input to CRGO have been duly considered in the Budget. This would not have happened without the support of the Steel Ministry".
On the impact of the reduction in duty on input material to CRGO, Sood said this will encourage increased production of electrical steel in India, while reduced duty on HR coil will make locally-produced HR coils more competitive in the market against imported ones.
For the steel industry, Sitharaman had announced reducing the duty to 7.5 per cent on products like primary/semi-finished products of non-alloy steel, long products of non-alloy, stainless and alloy steel.
The 2.5 per cent duty on iron and steel melting scrap, including stainless steel scrap, and raw materials used in the manufacture of CRGO (Cold Rolled Grain Oriented) steel has been lowered to nil in the Budget.
Source: economictimes.indiatimes.com
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