The Budget is in line with the stated policies of the government on economic growth, such as creation of employment opportunities, support of agriculture, upliftment of the downtrodden through financial inclusion and the Swachh Bharat Abhiyan. The finance minister has lucidly articulated the five challenges facing the economy and initiated measures to meet those.
For the steel industry, the Budget has little to offer directly, barring a provision to raise the import duty on steel and a reduction in import duty to two per cent on scrap. The doubling of import duty on metallurgical coke to five per cent and of coal cess to Rs 200 a tonne are going to hurt the steel industry, which is struggling due to subdued demand and rising imports. However, the finance minister had laid down a road map to increase investments in trade and industry, and to boost infrastructure. This might lead to increased demand for steel, even in the rural sector. The finance minister has not tinkered with tax rates, which clearly indicates the government's intention of reining in a predictable tax regime. The clear timeline for rollout of the goods and services tax, from April next year, augurs well for industry.
Read our full coverage on Union Budget
CEO & MD, Essar Steel