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Infrastructure Today Magazine | Post Budget Analysis | Cement
Post Budget Analysis | Cement
Jan 01, 2018
Higher rural credit: increased credit for the rural, agriculture and allied sectors from Rs 10 lakh crore in 2017v18 to Rs 11 lakh crore in 2018v19.
Increased minimum support price (MSP) for all previously uncovered kharif crops to at least one-and-half times of their production cost.
Focus on infrastructure investments continues in FY2019 with increase in the allocation by 21 per cent to Rs 5.97 lakh crore in FY2019.
Budgetary allocation for the roads sector (including Pradhan Mantri Gram Sadak Yojna) raised by Rs 5,644 crore, an increase of seven per cent to Rs 89,544 crore in FY2019. For railways, the capital expenditure outlay increased by 12 per cent to Rs 1.46 lakh crore.
Affordable Housing Fund to be set up under the NHB.
Total outlay (budgetary support + borrowings) for housing (HUDCO and PMAY Urban) increased from around Rs 20,000 crore in FY2017v18 to over Rs 44,000 crore in FY2018v19.
Improved rural incomes, higher rural credit and increased allocation for the rural, agricultural and allied sectors are likely to boost rural demand, including the requirement for rural housing. This, in turn, will have a positive impact on the cement sector as rural housing demand is a significant contributor to the overall cement demand mix. The PMAY continues to be a major driver for the cement demand, with around 50 lakh houses targeted in the rural areas and 37 lakh houses targeted in the urban areas. Higher outlay on urban housing and increased thrust on infrastructure, as reflected in 21 per cent higher allocation primarily led by roads and railways, are likely to boost the cement demand.
Ujjwal Batria, Managing Director & Country CEO, Nuvoco Vistas Corp Ltd (formerly Lafarge India)
The focus of Union Budget 2018v19 has been to boost investments in rural development, education, healthcare and social sectors.
With sizeable allocations to the rail and road sectors, it clearly recognises the infrastructure sector as a growth driver. With an increased GDP, which facilitates connecting and integrating the country with a network of roads, airports, railways, ports and inland waterways, the infrastructure sector should see a growth in demand. The focus on roads and rails will also positively impact consumption of cement and concrete. A growth of seven to eight per cent by the third quarter of the next fiscal is something that the cement industry would eagerly await.
Dr Shailendra Chouksey, President, Cement Manufacturers' Association (CMA
The increase in the outlay on rural infrastructure is one positive feature. But, then one was expecting a little more in terms of encouragement or need for incentivising the house building activity. Housing for All is already a focus area of the government. It has already done 5.1 million homes in rural India. In 2018v19 too, it expects this 5.1 million to be there. But I am not seeing a growth or traction in the Budget outlay. That is a bit disappointing. I am not seeing any major fillip to growth in the cement sector. The only area where one sees some traction is Housing for All. But that is fairly inexpensive in terms of cement consumption. At the moment, the infrastructure sector is all there is to sustain the cement industry to even help it register two to three per cent growth. I am not expecting any major change in growth in cement consumption to the much-desired level of seven to eight per cent.
Nuvoco Vistas Corp Ltd
Dr Shailendra Chouksey
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