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However, on the other hand, industry demand of rationalising Excise Duty has not been met in this Budget. Also, 'industrys' demand of reduction of value added tax (VAT) from the current 12.5% was not considered. However, the government laid more emphasis on infrastructure spending in this Budget.
The Budget increased allocation to the Bharat Nirman Yojana by 45% and the NHDP by 23%. Angel Broking believes that higher allocation on infrastructure projects by the government would help boost cement demand in the country.
Announcement
*Increase in allocation on infrastructure by the government. The government is targeting infrastructure spending at 9% of GDP by 2014. Government increased allocation for Bharat Nirman, National Highway Development Programme and Jawaharlal Nehru National Urban by 45%, 23% and 87% respectively.
*No roll back of Excise Duty (currently at 8%).
*No reduction on Value Added Tax (VAT) on cement, which is currently at 12.5%.
Impact
*This would help boost cement demand in India and benefit the overall Cement Sector.
*Positive for Cement Sector, as owing to the oversupply and sluggish season, players would not have been able to pass on the same.
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