Core sector industries such as steel and cement are likely to be big beneficiaries of the proposed infrastructure push announced by the finance minister Nirmala Sitharaman in the Union budget, even as withdrawal of duty protection on imports of certain steel products could be negative for the domestic producers.
The finance minister made a strong push for infrastructure-led growth, with the capital outlay for infrastructure projects raised by 35 per cent in 2022-23.
The initiative is likely to be centered on the Gati Shakti master plan in core sectors like railways, roadways, multimode logistics parks, and energy, which has the potential for spurring demand for metals and cement, industry experts say.
“The increased allocation to infrastructure spending will certainly have a multiplier effect on the economy, generating employment opportunities across the country and creating demand across product categories, including steel,” T.V. Narendran, CEO and MD of Tata Steel, said, commenting on the budget.The expectation of robust demand for steel and cement rubbed on to the stocks in the market.
S&P BSE Metal index was the biggest gainer on Tuesday, going up by 4.92 per cent, the highest among the sectoral indices. Individual stocks such as Tata Steel or UltraTech went up by 7 per cent and 4.1 per cent respectively as their peers.
However, withdrawal of duty protection for larger ‘public interest’ on certain items could be negative for the sector.