If India is to pull swathes of people out of poverty, it would need to grow at a double-digit clip over a sustained period of time. Therefore, in his second Budget, the finance minister stressed on themes supporting the Make-in-India mantra. However, it lacked details of how the government proposed to turn India into a manufacturing hub.
A touch disappointing was that there were no major measures announced for reviving sectors such as steel, cement and power. The rise in clean energy cess, on top of the 6.3 per cent increase in coal freight announced in the rail budget, is likely to nullify any gain that the sector might have expected following the coal auction process.
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In a proposal that should please the steel sector, reeling from a market glut, the rate of the basic Customs duty on iron and steel has been increased from 10 to 15 per cent. On the downside, the proposed increase in service tax and excise duty may inflict more pain on domestic steel makers. The proposal to build 400,000 houses in rural India and 200,000 in urban India could deliver a powerful impetus to the construction sector and accelerate the growth of steel, cement, and related sectors. The massive commitments to reboot the infrastructure sector could be significant growth drivers.
MD & Group CEO,
Jindal Steel and Power Limited