The Indian Steel Association (ISA) hopes that domestic steel demand in the country may likely see a big boost, on account of increased capital expenditure on infrastructure projects announced in the recent budget.
The Union Budget 2021-’22 presented by the country’s Finance Minister Nirmala Sitharaman on 1st February had proposed notable surge in capital expenditure to INR 5.54 lakh crore for infrastructure projects for the next fiscal. The Minister had announced plans to set up a Development Financial Institution (DFI)- an institution aimed at financing infrastructure and development projects. Also, a sum of INR 20,000 crore was provisioned in the budget to capitalize the DFI.
In a statement, ISA welcomed the government’s plans towards increased construction of roads and highways and proposed budgetary allocations to metro railways and airports. The enhanced investments in infrastructure and related segments will create spike in demand for steel, in addition to generating additional job opportunities, it noted.
The budget had proposed reduction of customs duty on imports of semi-flat steel from 12.5% to 7.5%. The customs duty on longs also was reduced from 10% to 7.5%. In addition, the 2.5% duty on iron and steel melting scrap has been made nil.
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