Budget 2020: What Does it Mean for Indian Steel Industry ?
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Indian Finance Minister, Nirmala Sitharaman today in the union budget FY19-20 has announced increase in spending on housing and infrastructure sector. Below are key highlights from today's announced budget:
1. Government has announced its intention to invest INR 100 lakh crore in infrastructure over the next five years.
2. The govt has given a massive push to all forms of physical connectivity through Pradhan Mantri Gram Sadak Yojana, industrial corridors, dedicated freight corridors, Bhartamala and Sagarmala projects, Jal Marg Vikas and UDAN Schemes. While the industrial corridors would improve infrastructure availability for greater industrial investment in the catchment regions, the dedicated freight corridors would mitigate the congestion of our railway network benefitting the common man. The ambitious programme of Bharatmala would help develop national road corridors and highways, while Sagarmala would enhance port connectivity, modernization and port-linked industrialization.
3.In the second phase of Pradhan Mantri Awas Yojana - Gramin (PMAY-G), during 2019-20 to 2021-22, 1.95 crore houses are proposed to be provided to the eligible beneficiaries.
4.Under Pradhan Mantri Awas Yojana - Urban (PMAY-Urban), over 81 lakh houses with an investment of about 4.83 lakh crores have been sanctioned of which construction has started in about 47 lakh houses. Over 26 lakh houses have been completed of which nearly 24 lakh houses have been delivered to the beneficiaries.
5.The dedicated freight corridors would mitigate the congestion of our railway network benefitting the common man. The ambitious programme of Bharatmala would help develop national road corridors and highways, while Sagarmala would enhance port connectivity, modernization and port-linked industrialization.
6.It is estimated that Railway Infrastructure would need an investment of 50 lakh crores between 2018-2030.
Has there been any change in duty structure ?
Indian iron and steel industry participants were seeking changes in duty structure of iron ore, coal, pellets and scrap however no change in duty structure was seen in the budget announced today. However customs duty on stainless steel products has been increased by 2.5% to 7.5%. The current customs duty on stainless steel products was 5%. This has been done to protect India's domestic steel industry against imports.
Changes in duty structure proposed in today's budget
| Chapter/ heading/ subheading / Tariff Item | Reduction in Customs duty on inputs and raw materials to reduce costs | Rate of Duty | |
| From | To | ||
| 7225, 7225 19 90 | Inputs for the manufacture of CRGO steel: - a) MgO coated cold rolled steel coils b) Hot rolled coils c) Cold-rolled MgO coated and annealed steel d) Hot rolled annealed and pickled coils e) Cold rolled full hard | 5% | 2.50% |
| Changes in Customs duty to provide level playing field to domestic industry | |||
| 7218 | Stainless steel products | 5% | 7.50% |
| 7224 | Other alloy steel | 5% | 7.50% |
| 7229 | Wire of other alloy steel (other than INVAR) | 5% | 7.50% |
