Budget FY’23: What does it mean for Indian steel industry?

The Indian Finance Minister, Nirmala Sitharaman, today presented the Union Budget for fiscal year 2022-23 (FY’22-23). According to SteelMint’s analysis, there has been no major change in the duty structure against the last fiscal. However, a few tariff rate changes have been proposed.

However, in a major boost, it is proposed to phase out the concessional rates on capital goods and project imports gradually and apply a moderate tariff of 7.5%. Also, the Production Linked Incentive (PLI) Scheme for achieving AatmaNirbhar Bharat has received excellent response.

Let’s take a look at the major highlights and announcements of Budget 2022-23 in relation to the Indian iron and steel industry.

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Budget highlights – 

Infrastructure:

• The National Highways network will be expanded by 25,000 km in FY’23. The government has allotted INR 20,000 crore to speed up this project.
• PM Gati Shakti masterplan for expressways to be formulated this fiscal year to facilitate faster movement of people and goods. The approach is driven by seven engines – roads, railways, airports, ports, mass transport, waterways, and logistics infrastructure. Projects announced in the National Infra Pipeline will be aligned with PM Gati Shakti.

Construction & Housing:

• INR 48,000 crore is allotted for PM Awas Yojana; 80 lakh households to be covered under this scheme.

Railways:

• 2,000 km of railway network will be brought under Kawach to build capacity and safety in FY’23.
• Faster implementation to set up metro systems will be encouraged. Multi-modal connectivity between mass urban transport and railway stations will be facilitated on priority.
• 400 new-generation Vande Bharat Trains with better energy efficiency and passenger riding experience will be developed and manufactured during the next three years.
• 100 cargo terminals for multimodal logistics facilities will be developed in the above-mentioned period.

EV & solar

• A battery swapping policy will be brought out which includes the concept of energy/battery as a service. This will help in developing requisite charging station ecosystem and is positive for the domestic EV space. The government plans to promote the private sector to incur required capex in this domain.
• For achieving 280 GW of solar capacity by 2030, INR 19,500 crore is allocated for PLI for manufacturing units for solar modules.
• Four pilot projects for coal gasification and conversion of coal into chemicals required for the industry will be set up to evolve technical and financial viability.
• Implementation of the Ken-Betwa Link Project, at an estimated cost of INR 44,605 crore will be taken up. This is aimed at providing irrigation benefits to 9.08 lakh hectare of farmers’ lands, drinking water supply for 62 lakh people, 103 MW of hydro, and 27 MW of solar power. Allocations of INR 4,300 crore in FY’22 and INR 1,400 crore in FY’23 have been made for this project.