Budget Reactions: Equipment manufacturers to see positive growth, says Volvo

The Union Budget 2012-13 has turned out well overall for the infrastructure industry. The Honourable Finance Minister has proposed good steps bringing cheer to the infrastructure and equipment manufacturer segment.

The government's plan to invest Rs.50,000 crores in infrastructure will encourage more projects on PPP model for massive infrastructure development. The signs for the road construction segment are very promising considering the government’s plan to invest Rs.10,000 crore and introduce external commercial borrowing. It has planned 8800 kms of road construction, which will provide more avenues for projects.

The implementation of the GST model will be watched carefully. With the government still in consultation with different states, we hope to see a practical road map for GST by August. This will be a huge boost for equipment manufacturers as it will reduce taxes on sales of equipment between states.

The mining sector has also seen some very bright spots with the exemption of customs duty on coal. I believe this is one of the high points of the budget since mining companies will look at venturing into newer projects. Another key point which will have a positive impact on equipment companies is the reduction of tax on iron ore equipment from 7.5% to 2.5%.

Overall the budget resonates well with the verticals we cater to. In the coming year, I hope to see positive developments in the equipment manufacturers industry.