On 01 February 2022, the Finance Minister of India, Smt Nirmala Sitharaman presented the eagerly anticipated Union Budget 2022. It comes at a time when the economy is still recovering from the devastating impact of the COVID-19 restrictions that had been imposed in the interest of the public, and as such, it was expected to make certain provisions for various industries in the country that would allow them to recover. Let’s take a look at some provisions that are expected to make an impact on the cement industry in India.
India is the second-largest producer of cement on a global scale with more than 7 per cent of the global installed capacity. Cement production reached 329 million tonnes (MT) in FY20 and is projected to reach 381 MT by FY22, driven by rural housing demand and the government’s strong focus on infrastructure development.[1]
Vimal Kejriwal, MD & CEO, KEC International Ltd., says, “I welcome the forward-looking, Capex-led Budget 2022, with a sharp 35 per cent increase in outlay. A strong focus on improving the safety of Indian Railways, faster implementation of metro rail systems, infrastructure status for data centers, along with an emphasis on PM GatiShakti with significant allocation towards Jal Jeevan Mission, Affordable Housing, BharatNet, and building 100 Cargo Terminals for multimodal logistics facilities augur well for KEC International Ltd. and our well-diversified businesses.”
It should be noted that India is still a developing country with tremendous improvements in infrastructure planned as of now. Infrastructural developments require cement as one of the primary raw materials, along with steel, coal, and other allied industries; and any expenditure or incentives for expenditure from the government in the infrastructural development sector is a very welcome sign which indicates a significant amount of growth in the cement industry, in addition to growth in these allied sectors such as coal, steel, aluminium, and mining. From this perspective, the Union Budget 2022 has been a blessing as it has made provisions for the following expenditures in infrastructural development [2]:
Government Scheme
Budget Estimates 2022-2023(INR crore)
National Highways Authority of India
1,34,015
Road Works
64,568
PM Awas Yojana
48,000
Metro Projects
19,130
PM Gram Sadak Yojana
18,000
Urban Rejuvenation Mission: AMRUT and Smart Cities Mission
14,100
Compensation to Service Providers for creation and augmentation of telecom infrastructure
9,000
National Investment and Infrastructure Fund (NIIF)
5,003
National Capital Region TransportCorporation
4,710
Member of Parliament Local Area Development Scheme (MPLAD)
3,965
Police Infrastructure
3,919
Border Infrastructure and Management
2,745
National Industrial Corridor Development and Implementation Trust (NICDIT)
1,500
North East Special Infrastructure Development Scheme (NESIDS)
1,419
Infrastructure facilities for Judiciary
858
Infrastructure Development and Capacity Building
588
Border Area Development Programme
566
Other Programmes including Railway Infrastructure
96,314
Total
4,28,400
As can be seen from the above table, a massive Rs 4,28,400 crore is expected to be spent for the purpose of infrastructural development in the upcoming financial year. A majority of these developments are concerning roads and transportation facilities in the country, however, schemes like the PM Awas Yojana, AMRUT[3], and Smart Cities Mission also incentivise residential infrastructural developments and give a boost to the real estate market. With the introduction of programmes such as the PM Gati Shakti, which aims to bring together Ministries related to transport (roads, railways, etc), we can expect a much more efficient planning system that may further increase the demand in the industries related to infrastructure, leading to even more growth.
One essential part of the Indian economy is the railway network. The railways present a special income and expenditure profile in the budget[4]. In 2022-23, the total expenditure on the Indian Railways is expected to be Rs 4,73,440 crore. While a lot of this amount goes towards the operating expenses of the railways, a significant percentage of it also goes towards infrastructural development which is undoubtedly a blessing for the cement industry.
Driving India ahead
Budget 2022 also makes provisions for improving the ease of doing business in India. Kejriwal further adds, “Initiatives such as the use of Surety Bonds as a substitute for bank guarantee, a cap on Surcharge of AOPs consortiums at 15 per cent as against 37 per cent earlier and an end-to-end online e-Bill System to enhance transparency are steps in the right direction for EPC contractors.”
While expenditure in the infrastructure, transport, and real estate sector from the government is sure to cause these sectors to grow, expenditure from individuals is also a key driving factor in the real estate sector. Individual customers would have greatly appreciated some form of tax benefits on home loans, which could have led to growth in the residential real estate sector, which also benefits the cement industry in addition to industries such as steel, home electronics and appliances, and many more. The middle class has also not received any reduction in the income tax, meaning that these individuals will be hesitant to make large investments such as real estate at the moment as well.
In conclusion, the new budget seems to be very beneficial for the cement industry, along with various other allied industries which play a role in construction and infrastructure. Budget 2022 promises tremendous developments in the public infrastructure and transportation in India, and development in these sectors is expected to lead to further development throughout the economy in the foreseeable future. Additionally, ease of doing business is also expected to improve with provisions such as the end-to-end online e-bill system. However, it is not only the government and large companies that form the market but also the individuals, and it would be very helpful for the industry if the government makes provisions for them.
Nuvoco Vistas Corp. Ltd., one of India’s leading building materials companies, has reported its highest-ever second-quarter consolidated EBITDA of Rs 3.71 billion for Q2 FY26, reflecting an 8% year-on-year revenue growth to Rs 24.58 billion. Cement sales volume stood at 4.3 MMT during the quarter, driven by robust demand and a rising share of premium products, which reached an all-time high of 44%.
The company continued its deleveraging journey, reducing like-to-like net debt by Rs 10.09 billion year-on-year to Rs 34.92 billion. Commenting on the performance, Jayakumar Krishnaswamy, Managing Director, said, “Despite macro headwinds, disciplined execution and focus on premiumisation helped us achieve record performance. We remain confident in our structural growth trajectory.”
Nuvoco’s capacity expansion plans remain on track, with refurbishment of the Vadraj Cement facility progressing towards operationalisation by Q3 FY27. In addition, the company’s 4 MTPA phased expansion in eastern India, expected between December 2025 and March 2027, will raise its total cement capacity to 35 MTPA by FY27.
Reinforcing its sustainability credentials, Nuvoco continues to lead the sector with one of the lowest carbon emission intensities at 453.8 kg CO? per tonne of cementitious material.
Jindal Stainless Limited has announced an investment of $150 million to build and operate a new wet milling plant in Jajpur, Odisha, aimed at doubling its capacity to recover metal from industrial waste. The project is being developed in partnership with Harsco Environmental under a 15-year agreement.
The facility will enable the recovery of valuable metals from slag and other waste materials, significantly improving resource efficiency and reducing environmental impact. The initiative aligns with Jindal Stainless’s sustainability roadmap, which focuses on circular economy practices and low-carbon operations.
In financial year 2025, the company reduced its carbon footprint by about 14 per cent through key decarbonisation initiatives, including commissioning India’s first green hydrogen plant for stainless steel production and setting up the country’s largest captive solar energy plant within a single industrial campus in Odisha.
Shares of Jindal Stainless rose 1.8 per cent to Rs 789.4 per share following the announcement, extending a 5 per cent gain over the past month.
Vedanta Limited has received approval from the Competition Commission of India (CCI) to acquire Jaiprakash Associates Limited (JAL) for approximately Rs 17,000 million under the Insolvency and Bankruptcy Code (IBC) process. The move marks Vedanta’s strategic expansion beyond its core mining and metals portfolio into cement, real estate, and infrastructure sectors.
Once the flagship of the Jaypee Group, JAL has faced severe financial distress with creditors’ claims exceeding Rs 59,000 million. Vedanta emerged as the preferred bidder in a competitive auction, outbidding the Adani Group with an overall offer of Rs 17,000 million, equivalent to Rs 12,505 million in net present value terms. The payment structure involves an upfront settlement of around Rs 3,800 million, followed by annual instalments of Rs 2,500–3,000 million over five years.
The National Asset Reconstruction Company Limited (NARCL), which acquired the group’s stressed loans from a State Bank of India-led consortium, now leads the creditor committee. Lenders are expected to take a haircut of around 71 per cent based on Vedanta’s offer. Despite approvals for other bidders, Vedanta’s proposal stood out as the most viable resolution plan, paving the way for the company’s diversification into new business verticals.
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