Encouraging for steel sector

This Budget strikes is a fine balance between growth and fiscal consolidation. The plan to limit fiscal deficit at 4.8 per cent in FY 14 was much needed, while simultaneously giving a fillip to infrastructure and manufacturing. Infra-building will get a boost with measures that include thrust on housing – both rural and urban, linking of waterways, ports and development of industrial corridors and so on. At present, when the steel industry including SAIL is commissioning large investments, it is encouraging to see the thrust on housing, water and irrigation schemes, power sector, road construction, rural development, urban transport and so on, through a combination of tax incentivisation and improved funding measures. All these steps will boost steel consumption where the per capita consumption of steel is only 59 kg per capita, as against the world average of 218 kg per capita. The Budget proposes capital allowance of 15 per cent on investment in plant and machinery of more than Rs 100 crore till March 2015, which will attract new investments and facilitate implementation of projects. As many of our projects are likely to be capitalised shortly, this would be beneficial to SAIL. However, higher surcharge of 10 per cent on direct tax-limited to one year, and increase in dividend distribution tax will leave fewer resources for growth, with companies. — C.S. Verma, Chairman, SAIL & NMDC