Budget impact on cement: Increase in housing spend positive; Rise in clean energy cess negative

The budgetary allocation on roads and railways has increased only 24% to Rs2.2tn. Increase on clean energy cess on coal from Rs200 per tonne to Rs400 per tonne. In order to offset the increase in these costs prices will have to be increased by ~Rs0.9 per bag of cement.

Mar 01, 2016 05:03 IST India Infoline News Service


Increase on clean energy cess on coal from Rs200 per tonne to Rs400 per tonne. In order to offset the increase in these costs prices will have to be increased by ~Rs0.9 per bag of cement.  The budgetary allocation on roads and railways has increased only 24% to Rs2.2tn as opposed to the 83% increase in budget allocation in the previous year. Allocation towards housing has decreased 8% over the amount allocated in the previous year.  An additional deduction of Rs50,000 towards interest on housing loan for “first home” buyers has been proposed. This is subject to loans only up to Rs3.5mn sanctioned during the next financial year and cost of the house not exceeding Rs5mn.

BFSI/Exchanges – Positive
Key Announcement Impact
Increase in rural and urban housing spending Positive for sector
Doubling of clean energy cess on coal Negative for sector
Increase in road and rail spending Positive for sector
Extension of  excise duty exemption for RMC unit Positive for large RMC players like ACC
No hike in rail freight Positive for sector
Possibility of sharp increase in excise duty of diesel and petrol Negative for sector
 

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