We welcome the Union Budget 2013-14, which is prudent, positive and investment-oriented. In the current challenging times it addresses multi-pronged issues to get growth back on track, while simultaneously aiming at fiscal consolidation.
A thrust on investment-led growth is the overarching theme of the Budget, with emphases on housing, water and irrigation schemes, linking of waterways and ports, development of industrial corridors, fillip to road construction and hike in rural development outlays.
Besides, credit enhancement to infrastructure debt funds, tax-free bonds and the investment allowance proposals will yield low-cost funds for infrastructure building.
Moreover, these measures will lead to increased steel use at a time when demand for steel has moderated this year.
The Budget proposes a capital allowance of 15% on investment in plant and machinery of more than R100 crore till March 2015, which will attract new investments and facilitate implementation of projects.
As many of our projects are likely to be capitalised shortly, this would be beneficial to SAIL. However, the higher surcharge of 10% on direct tax ? limited to one year ? and increase in dividend distribution tax will leave fewer resources for growth.