Budget proposals to provide impetus to steel industry: Experts

The steel industry today welcomed the Budget proposals and hoped that focus on areas such as ports, roads, affordable housing, physical infrastructure should provide the steel sector necessary impetus to meet its growth targets.
TV Narendran, Managing Director, Tata Steel India and South East Asia, said the industry, being a core sector, appreciates the Government's budgetary allocation for infrastructure development.
This focus on infrastructure will definitely improve the efficiency and competitiveness of the sector. The Government's plan to put in place a specific programme for development of multi-modal logistics would help the industry, he said.
The industry looks forward to working with the Government in its plans to develop infrastructure and empower rural communities, Narendran said.

Shivramkrishnan Hariharan, Director (Commercial), Essar Steel India, said, the policy initiatives in the Budget will have a catalytic effect on the economy. These include the abolition of FIPB that will encourage more FDI investment, increased allocation to the infrastructure sector that will enhance public spending, 100 per cent rural electrification programme, the move to have additional 20,000 MW of solar power plants, the creation of two more strategic crude reserves and increased support to affordable housing.
"In the steel sector, we expect incremental demand growth because of the significantly higher allocation to infrastructure, rural spending, and building of 3,500km of railway tracks in FY17-18. The reduction in customs duty on LNG will spur use of cleaner energy resources, enabling us to meet emission norms as agreed in the Paris Convention," Hariharan said.

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Credit rating agency ICRA said that the emphasis on affordable housing as well as other infrastructure areas like railways and roads is a positive, which would address the issue of an oversupply situation in the domestic steel industry, provided there were no problems in implementation.
"The impact of the budget proposals on the steel sector is moderately positive," Jayanta Roy, Group Head, ICRA said.
Additionally, end-to-end solution to be provided by the railways can potentially benefit steel producers in the medium term, since steel industry is freight cost intensive.
Allocating a lion's share of Rs 3.95 lakh crore for infrastructure sector and terming it as top priority of the government, Finance Minister Arun Jaitley today said the magnitude of investment in the space is bound to spur growth.

Steel Minister Chaudhary Birender Singh said that spending on infrastructure sector like road is a big boost as it would enhance the demand for steel.
The concessions of duty on raw material imported like nickel, hot roll used to make steel products will bring down the cost of input, he added.
Essar Steel India said that it expects incremental demand growth because of the significantly higher allocation to infrastructure, rural spending, and building of 3,500 km of railway tracks in 2017-18.
"The flexibility given to the Railways on the freight side to match competition is expected to translate into lower freight rates for steel and other commodities,"company's Director (Commercial), Shivramkrishnan Hariharan said.