EXPECTED BUDGET IMPACT: Neutral
LONG TERM OUTLOOK: Positive
We expect the FY13-14 union budget to have a neutral impact on the prospects of Metals & Mining Industry and companies operating within it.
We believe that higher fund allocation for infrastructure development of road, power, railways, ports and airports would be needed to revive steel demand in India which might not be easy, given that fiscal prudence remains a stated government objective.
Any increase in income tax rate or surcharge if proposed would further dampen already weak consumer durable and automobile demand and that would hurt flat steel demand in India.