The Indian economy has been facing a lot of challenges in the last two quarters. Low demand for manufacturing, less agricultural output, scarcity of jobs, etc., had collectively led to a lower GDP growth in the past few years. But the much awaited Union Budget 2019-20 is being viewed as the government’s first step towards bringing the Indian economy back on track and doubling it to 5 trillion dollars within the next five years.
A key component of the budget is the heavy investment of INR 100Lakh Crores to be spent for infrastructure, out of which an investment of INR 50 Lakh Crores is proposed for the development of railway infrastructure by the year 2030, while also investing a substantial amount for the upgradation of roadways, irrigation, housing, ports as well as introduction of new airports for better connectivity throughout the country. The government’s step towards building better infrastructure and investing a sum of INR 20 Lakh Crores each year is surely going to give a boost to the steel industry as it would increase the manufacturing and consumption of steel in the country. The expansion of metro rail projects, construction of railway stations, new railway lines, airports, toll booths, petrol pumps, facilities like bus stands, hotels, restaurants, etc., is going to shoot up the demand for steel in next few years.
Another major proposal that would have a major impact on the steel industry is the increase in duties on the import of finished steel products. Recognizing the threat that China poses, the steel ministry desires a hike in steel duties from 7.5-12.5% to 15% on finished steel goods. This can be seen as an opportunity for the local manufacturers of steel goods to have an increased demand, in return increasing their profit.
According to the Economic Survey for 2018-19, the country’s steel output is estimated to hit 128.6 million tonnes (MT) by 2021 and consumption to reach 140 MT by 2023 because of the investments in infrastructure, construction and automobile sectors. Such huge investments in strengthening the country’s infrastructure would have a positive effect in the economic activity across the sectors of development and growth. As Voltagreen has been a pioneer in steel construction in India, we look forward to the several opportunities in the coming years that are the nation’s steps towards a sustainable development with steel construction.
