The Union Budget 2024-25, in the election year, brings to the industrial sector exactly what is expected of an interim budget. Careful about not causing discontent over taxation, the Budget rides high on infrastructural growth and sustainability. ICR looks at the key highlights of the budget and the industry’s reaction to it.

As the honourable Finance Minister Nirmala Sitharaman presented the Interim Union Budget 2024-25 in the Parliament, the eyes and ears of the entire nation were glued to the live telecast to know firsthand what it entails. For taxpayers, the Budget came as a big sigh of relief as there were no changes in the tax brackets. With the many social welfare schemes that the PMO has been running as well as its focus on infrastructure growth, the details of this Budget are surely of interest for industries such as cement.
The pre-Budget sentiment of the industry revolved around the following aspects:

• Increased infrastructure spending: The government is expected to continue focusing on infrastructure development, which could lead to higher demand for cement.
• Focus on sustainability: The Budget might allocate funds for sustainable practices and manufacturing innovation in the cement industry, potentially reducing costs and enhancing its contribution to India’s green goals.
• Logistics and export support: Measures to improve logistics and export policies could stabilise costs and make Indian cement more competitive globally.
• Rising input costs: The industry is grappling with rising costs of coal and pet coke. The Budget is likely to address these concerns, through measures such as GST rationalisation or import duty reduction.

Once the Budget was announced, it was met with applaud from the industry. Here are the key highlights of the Interim Budget:

• The capital expenditure outlay for infrastructure development and employment generation will be increased by 11.1 per cent to Rs 11,11,111 crore, that will be 3.4 per cent of the GDP.
• On reforms in the states for ‘Viksit Bharat’, a provision of Rs 75,000 crore rupees as fifty-year interest free loan has been proposed to support milestone-linked reforms by the state governments.
• Three major economic railway corridor programmes have been identified under the PM Gati Shakti, which will be implemented to improve logistics efficiency and reduce cost energy, mineral and cement corridors, port connectivity corridors and high traffic density corridors.
• As per the PM Awas Yojana (Grameen), the target of three crore houses will be achieved soon. At least two crore more houses will be taken up in the next five years.

Industry expert reactions

“Nuvoco welcomes the initiatives in the latest Interim Budget, which acknowledges the Government’s commitment to growing the economy in challenging geopolitical conditions. As part of the PM Gati Shakti program, to foster strong multimodal connectivity, three proposed major economic railway corridors focusing on energy, minerals, and cement will improve logistics efficiency and reduce costs. This will benefit both the industry and the economy.
In addition, the focus on the Individual House Builders (IHB) Segment, particularly the new housing scheme for the middle class, aligns perfectly with the nation’s socio-economic goals. The initiative to construct two crore houses under the PM Awas Yojana and the progress of the Pradhan Mantri Awas Yojana (Grameen), with an additional two crore homes planned to be built over the next five years, is particularly noteworthy. The government’s efforts to improve port connectivity, decongest high-traffic rail corridors, and transform metro rail are positive developments for the ready-mix concrete industry. These measures should further improve the standard of living for millions of people and offer numerous opportunities for economic and community development.”

Jayakumar Krishnaswamy, Managing Director, Nuvoco Vistas Corp. Ltd

“JK Lakshmi Cement applauds the Honourable Finance Minister, Shree Nirmala Sitharaman, for crafting the visionary Union Budget 2024-25, a blueprint that aligns profoundly with our ethos of inclusive development. As a stalwart in the cement industry, we welcome the Government of India’s commitment to fostering growth, sustainability, and inclusivity. The Government’s strategic focus on all forms of infrastructure, be it digital, social, or physical, and a strong emphasis on women’s empowerment, resonates with our forward-looking mission. The significant increase in infrastructure outlay to INR 11.11 lakh crores and the emphasis on green growth shows the Government’s pursuit to propel our nation towards economic excellence.”
“As a key player in the cement sector, we are eager to contribute meaningfully to the strategic railway corridor programmes, particularly those targeting energy, mineral and cement corridors. We also applaud the Government’s efforts to deepen GST reforms, creating a more unified and efficient tax regime. This, coupled with initiatives like the bio-manufacturing scheme, and multi-modal connectivity projects, creates a favourable environment for sustained economic growth and job creation. As we navigate the next five years of unprecedented development, JK Lakshmi Cement remains steadfast in its commitment to supporting the Government’s vision of a Vikisit Bharat by 2047 and contributing to the nation’s journey towards economic excellence while creating opportunities for all.”

Arun Shukla, President and Director, JK Lakshmi Cement

“Aatmanirbharta and Viksit Bharat were foundational to the budget, embodying a visionary approach and setting the stage for a robust and dynamic economic landscape, aligning with the government’s mission to build a prosperous and self-reliant India on the global stage. As a prominent solar manufacturer, we appreciate the Rooftop Solarisation+Muft Bijli and are hopeful that this forward-thinking scheme is a groundbreaking effort to democratise access to solar power, making clean energy an integral part of everyday life. Our ethos centres around making solar energy not only environmentally friendly but also economically viable and we anticipate that this initiative will catalyse the transition towards renewable energy and provide a major breakthrough in the energy sector. While we were anticipating updates on GST for solar products, we look forward to the detailed budget for further insights. The collective effort toward energy independence and a more sustainable future gives the much-needed impetus and instils a newfound motivation towards making India a green nation. We are optimistic that the full-fledged budget will open new doors and provide a plethora of opportunities that will not only impact the communities nationwide, but contribute to a cleaner, greener, and more sustainable energy landscape.”

Raman Bhatia, Founder & Managing Director, Servotech Power Systems (for Solar Industry)

“As we navigate the landscape of Union Budget 2024, it’s crucial for the government to accentuate and foster an environment for both local and global investments in semiconductor technology, AI, and digital platforms. This strategic focus aligns with our industry’s evolution. Simultaneously, we recognise the imperative to integrate these cutting-edge technologies into our educational curriculum, ensuring a skilled workforce. This synergy is pivotal for propelling our nation towards the coveted 7 trillion economy by 2030.”

Sushil Virmani, Managing Director,Best Power Equipment (BPE)

“We acknowledge the strategic direction outlined in the 2024 interim budget, particularly its focus on reinforcing the affordable housing sector. The progress in the implementation of PMAY – Grameen, approaching the target of three crore houses, with a commitment to taking up construction of two crore additional houses over the next five years, reflects the government’s dedication to meet the growing demand for housing in rural areas.”

Ashwin Sheth,CMD, Ashwin Sheth Group

“The Interim Budget for 2024-25 presented by Union Finance Minister Nirmala Sitharaman reflects a comprehensive vision aimed at fostering inclusive growth and sustainable development in India. The focus on transforming India into ‘Viksit Bharat’ by 2047 underscores the government’s long-term commitment to national development. This vision, encapsulated in the slogan ‘sabka saath, sabka vikas’ (together with all, development for all), emphasises the inclusive nature of the government’s approach. The emphasis on GDP, redefined as governance, development, and performance, is a strategic move, particularly in the context of the upcoming general election. This redefinition indicates a shift towards a holistic view of economic growth, one that intertwines effective governance and sustainable development with performance metrics. It’s a narrative that might resonate well with the electorate, considering the administration’s bid for a third consecutive term. The commitment to the PMY – Grameen, with the target of constructing two crore additional houses, continues the government’s focus on rural development. Achieving the milestone of three crore houses under the rural housing scheme and setting an ambitious target for the next five years reflects a significant investment in infrastructure development that addresses a basic need – housing.”

Sandeep Runwal,President, NAREDCO Maharashtra

“The Interim budget was laid on the premises of infrastructure, housing, green energy initiatives and innovation, setting up the foundation for a 6-7 per cent sustained GDP growth in the next few years. The unwavering commitment to infrastructure development stands as a cornerstone for fostering economic growth, extending tangible impact on the real estate sector in the longer run. The strong 11.1 per cent YoY increase in infrastructure outlay to over INR 11 lakh crore signals a steady and significant wave of upcoming developments and opening of vast opportunities for all stakeholders including real estate. The continued emphasis on green growth, particularly through the promotion of electric public transport and charging infrastructure development, further positions India on the path of sustainable and environmentally conscious real estate development. At the same time, the government’s persistent emphasis on affordable housing unveils a myriad of opportunities for residential developers, as they position themselves to make substantial contributions, aligning with the broader vision of inclusive and accessible living. Amid positive market synergies in the form of stable interest rates, attractive incentives and increased affordability, domestic investors too are likely to resonate upbeat confidence towards all real estate segments.

Badal Yagnik,Chief Executive Officer, Colliers India

“The establishment of new infrastructure corridors for ports, energy, minerals and cement will boost manufacturing and supply chains. Doubling the number of airports to 149 will energise the aviation sector. As a manufacturing-focused company, we welcome the government’s aim to enhance the EV ecosystem through manufacturing and charging infrastructure support.

Rahul Garg, Founder and CEO, Moglix

“The interim budget for FY 2024-25 lays a strong foundation for economic growth and resilience through major impetus on infrastructure development. At Louis Berger, we are pleased to see the emphasis on this sector which will be a catalyst in ensuring equitable access and participation in economic opportunities across the nation. We welcome the increase in capital expenditure on infrastructure for the fourth consecutive year to 11.11 lakh core. This will accelerate the efficient use of land resources, enable adequate resources for existing and upcoming urban infrastructure, enhanced availability and affordability of urban land and job creation.”

Surajit Bhattacharya, Vice President & Executive Director (Asia), Louis Berger

“Keeping the fiscal consolidation target at 5.1 per cent will decrease the cost of borrowing for businesses and industries. This in turn will help stimulate economic growth, stabilise the economy and reduce the risks of inflation. The enhancement in infrastructure outlay by 11 per cent will bode well for firming up the growth of residential, commercial and industrial real estate asset classes across the geographies. The augmentation of multi-modal corridor connectivity with new railway corridors and doubling of airports and ports corridors will have a multiplier effect on the real estate landscape.
The extension of the PMAY scheme for rural areas is in accordance with the objective of Housing for all laid by the Hon’ble PMO. A focused direction is set for addressing the housing deficit needs of the urban poor with the buy or build house motto. The continual skilling and upskilling of the working populace will help the sector gain a competitive advantage and increase direct as well as indirect employment opportunities. Therefore, India’s vision for Amrit Kaal is stated very clearly and thus the country is on track to becoming Vikshit Bharat by 2047.”

• Dr Niranjan Hiranandani, Founder, Hiranandani Group, and Chairman, National Naredco