Providing a broad-spectrum booster shot to the economy, Budget 2022-23 is progressive – especially with its emphasis on building the country’s infrastructure. It clearly emphasised the top priorities of the government – PM Gati Shakti for sustainable growth, inclusive development, productivity enhancement, and financing of investments.
Following India’s Net Zero commitment articulated at the COP26 summit, this year’s Union Budget speech rightly focuses on the key themes of energy transition and climate action. The announcement of the setting up of four pilot projects for coal gasification and conversion of coal into chemicals highlights the country’s stance that there should be mindful utilisation of resources.
Energy transition requires major investments and the planned issuance of sovereign green bonds will help raise the required funds at competitive rates to support the massive green infrastructure initiative needed to progressively bring down our carbon footprint.
The Budget has made a strong push for infrastructure-led growth with capital outlay for infrastructure projects raised by 35% in FY2023. Investments centered around the Gati Shakti Master Plan in core sectors have the potential for spurring demand for metals. Cumulative allocation to flagship schemes like PMAY and Jal Jeevan Mission has been increased, which is a positive for long steel and pipe manufacturers.
Focus on self-reliance, especially in Defence and Solar Module manufacturing, remain positives for domestic steel demand. On the raw material side, the extension of customs duty waiver on ferrous scrap in FY2023 is a welcome development for secondary steel manufacturers. However, withdrawal of ADD/CVD protection on certain stainless steel, coated steel flat products, bars of alloy steel and high speed steel may impact the domestic industry.