- Finance Ministers announcement that the fiscal deficit target would be limited to 3.5% of GDP is a positive measure which would contain inflation and contribute to growth of the economy. This will also help in improving country’s credit rating by the External Agencies.
- Focus on tax reforms to improve compliance is also a welcome measure to the Corporate world as it is expected to ease the compliance aspects.
- The Plan outlay for the road and rail projects amounting to about Rs.1.8 lakh Crores would be a booster to the ailing Steel Industry as this would induce demand for steel products especially for RINL since RINL’s product range comprises of Long products which would be used in Construction projects.
- The thrust on the rural sector by way of electrification projects, irrigation schemes, etc., would also benefit the Steel industry to cater to the steel requirements of the rural sector.
- However, doubling of clean energy cess on the coal from Rs.200/T to Rs.400/T would have considerable impact on the Steel industry as coal is a major raw material in the process of steel making. Similarly the phasing out tax exemptions which are presently available in the form of weighted deductions for Scientific Research and R&D programme would also have some adverse impact in the Steel sector considering that a lot of research activity is undertaken for the development of steel technologies and products.
- Restricting claim of accelerated depreciation to 40% in place of existing claim ranging from 60% to 100% for various categories of assets would also have adverse impact on the Corporate sector.
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