Attributed to T. V. Narendran, CEO & MD, Tata Steel
The Hon’ble Finance Minister presented a very progressive and growth oriented budget while retaining the government’s focussed approach on infrastructure-led economic revival. We welcome all the proposed reforms. However, the implementation of these reforms will be critical for the benefits to percolate across the economy.
The increased Capex in the infrastructure sector, including the healthcare infrastructure, will have a multiplier effect as it will create demand across product categories, including steel. Announcements like the National Rail Plan, Jal Jeevan Mission, and City Gas Distribution Network will generate new employment opportunities and spur demand in multiple sectors.
The government has done a balancing act of infrastructure development between the rural and urban areas which will again have a positive impact on the economy and the society at large. The Budget has also tried to address myriad concerns of the informal sector, including the migrant workers, by announcing the social security scheme for the gig economy workers, which is again a welcome step.
Exemption of duty on steel scrap and reduction of customs duty on steel products would benefit the MSME sector. However, the reduction of customs duty on steel products will have no significant impact on the steel industry as most of the steel imported into the country today comes from countries with whom we have an FTA (Free Trade Agreement) and hence they enjoy zero import duty.
The government’s consistent effort to address the issues related to ease of doing business is a welcome approach as the Budget has further widened the scope of faceless taxation that will eventually reduce litigation.
Reforms and measures including Production Linked Incentive (PLI) scheme, setting up of Development Finance Institution (DFI), Asset Reconstruction and Asset Management Company, Voluntary Vehicle Scrappage Policy, simplification of regulatory complexities, extension of tax holiday for startups will provide much needed fillip to the economy and enable growth.
The government is aggressive on its divestment plans and has also reiterated its focus on the monetisation of government assets.
Overall, we can call it a reformist Budget as it recognises and emphasises the participation of private players in all key areas, including the financial sector.
