Union Budget 2020-21

The Union Budget 2020-21, presented today by the Hon’ble Finance Minister of India, recognises the aspirations of growing India. The focus is on the economic development through increased infrastructure capex along with the societal commitments.

The budget continues to focus on the infrastructure sector, which is steel intensive. The infrastructure sector has the potential to kick start the economy, boost capex cycle, create jobs outside the urban centres and hopefully provide impetus to the heavy vehicle segment. Announcements related to Railways, Aviation, as well as New Logistics Policy will surely complement the infrastructure story. Initiatives like expansion of national gas grid and piped water supply to households will boost steel demand.

The aggressive focus on the rural and agriculture sector is a welcome step. The goal of increasing farmers’ income will give fillip to the rural demand and support growth. Removal of the Dividend Distribution Tax is a good move as this has been a long-standing demand from Corporate India. The new regime of personal income tax, relief for MSMEs,tax exemption for sovereign wealth funds, tax sops for start-ups, etc. will further improve the sentiment and aid the growth of the economy.

The budget emphasises the role of public-private-partnership to drive sustainable growth. The government’s focus on ease of doing business, ease of living, ease of transaction and ease of compliance are promising propositions for a better tomorrow. Going forward, we hope that the government will take more steps to address the cost of doing business, effect further reforms to unlock the potential in mining and take measures to revive the automotive sector.

Overall, while the intent of the budget is commendable, implementation will be key.