The Union Budget 2019-20 will give a push to big-ticket infrastructure projects and thereby increase the demand for steel, industry players said.
Finance Minister Nirmala Sitharaman on July 7 announced a slew of steps to scale up the country's infrastructure, including augmenting 1,25,000 km of rural roads under the Pradhan Mantri Gram Sadak Yojana (PMGSY) at a cost of Rs 80,250 crore and creating a national highways grid.
"Clear emphasis has been laid on the infrastructure development along with a massive push to every connectivity avenue including industrial corridors, dedicated freight corridors, Bharatmala, Sagarmala, UDAN, and PMGSY," Steel Authority of India Ltd (SAIL) Chairman Anil Kumar Chaudhary said.
He said the Budget also proposes investment of Rs 50 lakh crore in augmenting railways infrastructure by 2030 as well as substantial investments for roadways upgradation and connectivity.
The government's emphasis on investing Rs 20 lakh crore every year in infrastructure development will certainly help in increasing steel consumption and will facilitate the growth of the domestic steel industry, Chaudhary said, adding that SAIL is geared up to cater to the increased demand.
Tata Steel CEO and MD T V Narendran said the domestic steel market has seen some decline in demand, and the measures announced in the Budget are a welcome development.
"We believe investment in the infrastructure sector and moves to attract private capital in railways and waterways can have a positive cascading effect in the economic activity across sectors of development and growth.
"Connecting rural India, both physically and digitally, is another positive step for the economy. Announcement of streamlining multiple labour laws into a set of 'four labour codes' is a progressive step," he said.
He further said the cost of doing business in India is one of the highest in the world, and the measures announced in the Budget, including logistics solutions, will address some of the issues faced by the capital-intensive steel industry.
N A Ansari, Joint Managing Director, JSPL, said the proposed investments in infrastructure, including improving railways through the public private partnership (PPP) model, can be an opportunity for the steel industry.
Rashtriya Ispat Nigam Ltd (RINL) CMD P K Rath also said investment in infrastructure and housing sectors will spur demand and growth in the steel sector.
The Economic Survey for 2018-19 estimated the country's steel output to hit 128.6 million tonnes (MT) by 2021 and consumption to reach 140 MT by 2023 on the back of investments in infrastructure, construction and automobile sectors.