The 224 million tonne Indian cement industry has breathed easy with no roll back of excise duty (currently at 8%) in the Budget 2009, as was expected by industry experts. This is comes as a good news for the industry as currently it cannot been bear the burden of hike in excise duty to the consumers due to approaching oversupply of cement and present sluggish demand.
To add to the excitement of the industry, higher allocation on infrastructure projects by the government would help boost cement demand in the country. However, no specific measures announced for the cement industry comes as a disappointment.
ACC Ltd managing director Sumit Banerjee said, ?The thrust on infrastructure and housing spells well for construction and building materials such as cement and steel. But we are disappointed that cement fails to get any respite from the high rate of taxes and duties.? The industry?s demand of rationalising excise duty has not been met in this Budget. Also demand of reduction of value added tax (VAT) from the current 12.5% was not considered.?
According to Vinita Singhania, MD of JK Lakshmi Cement Ltd, ?Absence of specific measures for interest rate reduction is a concern. Also request for correction in the excise structure and expectation of enhancement of the exemption limit of income tax on housing loans have not found a place in the Budget. Moreover, service tax on the railway freight is a damper and would raise the delivered cost of many commodities, including cement,? she added.
?We are happy that the demand for cement will increase with the boost in infrastructure projects. The additional capacities which will be added by different players will be completely utilised. This Budget is good for common people. We expect a stimulus package for the industry in the coming months,? said Vinod Juneja, MD of Binani Cement Ltd.