'FM MUST INCLUDE ROBUST CONFIDENCE-BUILDING MEASURES TO FUEL GROWTH'We are just a few days away from the momentous occasion of Budget Presentation when we will all be scanning the Finance Minister’s speech minutely for good news for us. And this year’s budget will be a special one as the Govt. is expected to announce some robust measures to ward off the impact of demonetization and lift up the spirits of the people.
The expectation from this year's budget (2017-18) is arguably running high owing todemonetization and clubbing of railway budget. The Industry expects the Finance Minister to announce sector related policy initiatives that could help fuel overall growth and bring the GDP back to 7 plus level, from the current 6.6.
Cement Industry plays a very vital role in the overall economy and is prone to fluctuations in demand, governed by the Govt. policies. Hence, the new budget's impact on the cement industry will have a palpable effect on the housing and realty demand. The cement industry thereforeexpects from the FM a policy that could standardize construction materials in order to uplift theinfrastructure sector that uses cement as a major input.
What is required is the confidence building measures in the upcoming budget to bring the vitality of infrastructure sector and housing sector back to pre-demonetization level. Also, some cut in the tax rates for the middle class groups will be a much-awaited measure, which can increase the disposable income of middle class group. This could fuel the sagging demand of the real estate and help the Cement Industry too.
It would also be pertinent if the entire Real Estate sector could be accorded the infrastructure status rather than confining this status to only affordable housing segments. This measure could help the demand revival of real estate and in turn will boost the cement demand.
The Govt. needs to look at the Cement as an essential commodity as it is, and ease out some of the taxes levied on it. Unfortunately, it still remains the heavily taxed commodity. What is required is to bring it to the level of steel sector, at least. Moreover, the import duty on the input for cement industry is higher than the finished product. There is a need to relook at it logically and correct the position to make the Cement Industry more competitive and viable.
To make the cement industry go green, it is important to offer fiscal incentives for deploying renewable energy and saving natural resources like coal and oil. I hope the FM would be able to apply his thoughts on this aspect that would do well for the environment.
In essence, the new budget must offer ways to boost infrastructure sector in order to scale up the industrial growth. The FM should consider increased allocation to ministry of rural development (schemes focused on rural housing roads and bridges), & ministry of housing & poverty alleviation, though 20% surge in allocation towards urban development Ministry (covers smart city & AMRUT scheme) is expected in the new budget.
Since GST has been postponed for its implementation by some months, I expect the union budget to be calibrated in a way that it’s aligned to meet the challenges of upcoming GST.
Overall, expect the budget to come up with measures that would cheer up the sentiments and the growth, both.