Nine construction stocks rose by 0.96% to 2.96% at 11:55 IST on BSE after the government hiked basic excise duty on petrol and diesel to fund the ambitious infrastructure development programme particularly for building roads.
The government made announcement after trading hours yesterday, 1 January 2015.
Meanwhile, the S&P BSE Sensex was up 331.91 points or 1.21% at 27,839.55.
Among construction stocks, Jaiprakash Associates (up 0.96%), Hindustan Construction Company (up 1.49%), NCC (up 1.27%), L&T (up 1.11%), IRB Infrastructure & Developers (up 1.01%), Unity Infraprojects (up 1.9%), Patel Engineering (up 2%), Valecha Engineering (up 2.96%), and IL&FS Transportation Networks (up 1.22%) gained.
In order to fund the ambitious infrastructure development programme of the Government, particularly the building of 15000 kilometers (kms) of roads, during current fiscal year ending 31 March 2015 (FY 2015) and next fiscal year ending 31 March 2016 (FY 2016), the Government has decided to increase basic excise duty on petrol and diesel (both branded and unbranded) by Rs 2 per litre. Allocation of these resources to the road sector will also spur economic activity and employment generation arising from the road construction sector. These increased rates of basic excise duty will be effective from 2 January 2015. There will be no change in other excise duty rates applicable to these commodities.
Reportedly, the government will mop-up Rs 10500 crore a year from the current hike in excise duty on petrol and diesel.
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