Demand for cement is likely boost up in the coming years
India is the second largest cement producers of the world after China, and produces around 7-8% of the total cement produced globally. Cement is one of the most important parts in the infrastructure sector and thus has a major share in the GDP of the country and also plays a very critical role in the development of the economy of the country.
Cement sector was also affected when the recession and inflation had hit the industrialization of the country and slowed down its economic growth and development.
Cement industry had expected a lot from the budget of 2013, which include reduction in excise duty, levy customs duty, introduction of tax free bonds and give it an equal status like those of coal, steel, crude oil etc. Outcome of the budget 2013-14 for the cement industry was both on negative and positive sides. On the positive side, the government came up with a proposal of a package of US$ 1 trillion for the infrastructure development by 2017. The home loans interest rates were decreased further, giving a relief to a common man who dreams of building a house of their own. Around Rs 2,000 crore were allocated for the urban housing fund, according to which the low cost housing facility was to be provided in order to boost up the demand for cement in the rural areas. On the other side, hike in diesel and freight charges was tragic news for the cement industry.
According to the analysts, FY 14 will prove to be a better time period for the cement industry owing to the elections. During the elections of 2014, government will tend to spill out benefits to the businesses, thus providing benefit to the cement industry.