As India seeks to build infrastructure that can undergird its ambitions of expanding into a $5-trillion economy by the middle of this decade, consumption of cement is set to increase by up to 6 per cent immediately in the country which is the world's second biggest market for the primary building material.
The Centre's proposal to invest Rs 102 lakh crore to build ports, airports, motorways or irrigation canals is expected to drive demand for the commodity, of which India is also the world's second-biggest producer after China but trails the global average in per capita consumption. The lack of adequate investment in infrastructure has also been blamed for the broader economic slowdown, causing capacities to idle and factory expansion budgets to dwindle.
"The government's infrastructure investment plan will boost the cement sector's demand by 5-6 per cent. The housing-for-all scheme is also about to gather momentum," said Binod Modi, senior research analyst, Reliance Securities.