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Credit rating agency ICRA said that the emphasis on affordable housing as well as other infrastructure areas like railways and roads is a positive, which would address the issue of an oversupply situation in the domestic steel industry, provided there were no problems in implementation.

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Credit rating agency ICRA said that the emphasis on affordable housing as well as other infrastructure areas like railways and roads is a positive, which would address the issue of an oversupply situation in the domestic steel industry, provided there were no problems in implementation.

"The impact of the budget proposals on the steel sector is moderately positive," Jayanta Roy, Group Head, ICRA said.

Additionally, end-to-end solution to be provided by the railways can potentially benefit steel producers in the medium term, since steel industry is freight cost intensive.

Allocating a lion's share of Rs 3.95 lakh crore for infrastructure sector and terming it as top priority of the government, Finance Minister Arun Jaitley today said the magnitude of investment in the space is bound to spur growth.

Steel Minister Chaudhary Birender Singh said that spending on infrastructure sector like road is a big boost as it would enhance the demand for steel.

The concessions of duty on raw material imported like nickel, hot roll used to make steel products will bring down the cost of input, he added.

Essar Steel India said that it expects incremental demand growth because of the significantly higher allocation to infrastructure, rural spending, and building of 3,500 km of railway tracks in 2017-18.

"The flexibility given to the Railways on the freight side to match competition is expected to translate into lower freight rates for steel and other commodities,"company's Director (Commercial), Shivramkrishnan Hariharan said.

 

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)

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