Sunday, July 13, 2014

Indian steel sector is upbeat on budget proposal to develop 100 smart cities
India is the biggest producer of sponge iron. Its production is set to jump 10 times in 20 years
Photo: Down To Earth
Sunday, 13 Jul 2014: The domestic steel sector is upbeat on the budget proposal to develop 100 smart cities, a move that is likely to generate demand for key building and construction materials like steel and cement.

Mr CS Verma chairman of Steel Authority of India Limited said that "The renewed focus on infrastructure viz. development of smart cities, ports, Pradhan Mantri Gram Sadak Yojna, power plants, plan for doubling pipeline grid, metro for tier 2 cities, industrial corridor, incentives for housing, and revival of SEZ etc. will go a long way to further consolidate growth and giving fillip to steel sector which has faced stagnant demand of late."

The increase in customs duty for stainless steel will provide the requisite protection at a time when the demand has slackened. Other measures such as reduction in customs duty for steel grade limestone and dolomite, as well as ships for breaking should also help the industry.

Mr Manoj Kumar Agarwal MD of Adhunik Metaliks, a maker of speciality steels said that "The move to develop 100 smart cities leading to infrastructural development will increase demand of steel and cement resulting in inclusive growth. Various sectors will be highly benefited by this infrastructural enhancement."

Mr Subhrakant Panda MD of Indian Metals and Ferro Alloys Limited said that "The Finance Minister's maiden budget is noteworthy for the statement of intent to revive manufacturing and infrastructure sectors while maintaining fiscal discipline. The government's mission of housing for everyone by 2022 and setting up 100 smart cities are bold moves which will go a long way in changing the country's landscape.”

He said that "These will not only help sectors like cement, steel etc but will also increase the employment opportunities. As far as the ferro alloys industry is specifically concerned, steps taken to encourage key sectors which in turn will boost growth will have a positive impact."

Mr Jayanta Roy Senior VP, Co-head, Corporate Ratings, ICRA Ltd said that "The long term impact on the steel sector is expected to be positive because of the policies on construction and infrastructure sectors, which generate around two third of steel demand in India.”

Mr Roy said that “Policies including increased tax incentives to individual home buyers and enhanced allocation towards affordable housing are expected to spur growth in the housing sector. Additionally, development of 100 smart cities, 15,000 kilometers of pipeline for the oil and gas sector, 8,500 kilometers of roads, and development of new ports and airports would provide a fillip to the construction sector.”

He said that also, the increase in custom duty on stainless steel flat products and reduction of customs duty on import of ships for breaking and steel grade dolomite and limestone are positives for the industry. The Government's intention to sort out the current issues in iron ore mining and a modification of the MMDR Act towards making it more supportive to the industry would be critical for the growth of the sector.

Mr Jaijit Bhattacharya, Partner, Infrastructure and Government Services, KPMG said that "We welcome the initiative which is the need of the hour for the Indian economy. Cities are the growth enablers and current Indian cities are choking with the economic growth in India. It is heartening to note that budgetary provisions have been made for modern next generation cities."

Mr Venkatesan Subramanian, Vice President & Global Leader, Metals & Minerals Practice, Frost & Sullivan said that "For the metals and minerals industry, the hike in export duty of bauxite and import duty hike on flat rolled products of stainless steel are positive as it is expected to boost domestic sales and bring additional investment into the sector in form of new projects and capacity expansion in these industries. The government policies in this sector points to the right direction of value addition for mineral ores fulfilling domestic demand through local production."

Courtesy: Steel Guru
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