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Focus on infra spending in Budget to boost petrochemicals demand: Govt

The government on Tuesday said it expects more demand for petrochemicals like polymers and speciality chemicals in the country due to increased emphasis on infrastructure spending in the Budget

Budget 2021 | India's infrastructure

Press Trust of India  |  New Delhi 

Representational image
Representational image

The government on Tuesday said it expects more demand for petrochemicals like polymers and speciality chemicals in the country due to increased emphasis on infrastructure spending in the Budget 2021-22.

Increased spending on infrastructure development in sectors like agriculture, healthcare and automobiles will result in increased demand for petrochemicals, according to an official statement.

That apart, import duty cut on feedstocks such as naphtha for production of chemicals and petrochemicals will make the domestic products globally cost-competitive, it added.

"The massive emphasis on infrastructure spending is expected to result in an additional consumption of petrochemicals like polymers and specialty chemicals," the statement said.

The agriculture-focused measures like doubling of outlay for micro-irrigation to Rs 10,000 crores will further fuel demand for polymer-based irrigation products and services, it said.

The new vehicle scrapping policy will boost the polymer and elastomer consumption in anticipation of requirement of new and additional vehicles.

The increased outlay on healthcare and the fund for vaccination will boost polymer consumption with requirements of syringes and other polymer-based healthcare products.

"In general, with increased government spending, the requirement of petrochemicals and polymers which are required in a wide range of sectors will also increase and provide a fillip to local demand," the statement added.

Further, the government said the roll-out of the production-linked incentive schemes for key end-use sectors will boost petrochemical consumption in the country.

Among the sectors earmarked, seven sectors like mobile phone manufacturing, auto components, medical devices and textile products use significant quantities of petrochemicals, it added.

In the Budget 2021, the government reduced import duty on naphtha from 4 per cent to 2.5 per cent; while on carbon black, it was hiked from 5 per cent to 7.5 per cent.

Similarly, the import duty on builder's ware of plastics was increased from 10 per cent to 15 per cent, on polycarbonates from 5 per cent to 7.5 per cent, and on Methylene diphenyl diisocyanate (MDI) from NIL to 7.5 per cent.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Tue, February 16 2021. 19:41 IST