Budget proposals
The following announcements have been proposed in the Union budget 2015-16:-
- National Investment and Infrastructure Fund (NIIF), to be established with an annual flow of Rs 20000 crores to it.
- Introduction of tax-free infra bonds for railways and roads to raise funds for investment.
- Budget provides additional funds for investment in infrastructure, Rs 70,000 crore more in 2015-16 over previous year.
- Propose to allocate Rs 25000 crore in FY 2015-16 to the corpus of Rural Infrastructure Development Fund (RIDF) set up in NABARD; Rs 15000 crore for Long Term Rural Credit Fund; Rs 45,000 crore for Short Term Cooperative Rural Credit Refinance Fund; and Rs 5,000 crore for Short Term RRB Refinance Fund.
- PPP mode of infrastructure development to be revisited and revitalised and govt. to bear majority of the risk.
- NITI to be established and involvement of entrepreneurs, researchers to foster scientific innovations.
- Under Swachh Bharat programme, total of 50 lakh toilets built in FY 2014-15, and will meet target of 6 crore toilets to promote for preventive health care and building awareness.
- Proposes to fulfil a roof for all by 2022, which require to build 2 crore houses in rural India and 4 crore in urban areas.
- Focus on completing 100000 km of roads currently under construction plus sanctioning and building another 100000 km of road.
- Focus on improving the quality and effectiveness of activities under MGNREGA. MGNREGA allocation increase by Rs 5,000 crore more.
- Corporate tax reduced from 30% to 25% for next four years. Exemptions for individual tax payers to continued.
- Propose to set up 5 ultra mega power projects, each of 4000 MW, in the plug and play mode. This should unlock investments to the extent of Rs 1 lakh crore.
- Proposes sum of Rs 7,060 crore in the current fiscal to focus on Prime Minister vision of developing one hundred Smart Cities
- Ports in public sector will be encouraged, to corporatize, and become companies under the Companies Act to attract investment and leverage the huge land resources.
- Plans to Upgrade 80000 secondary schools and add or upgrade 75000 junior/middle schools to the senior secondary level to ensure a Senior Secondary School within 5 km reach of every child, while improving quality of education and learning outcomes.
- New All India Institute of Medical Science (AIIMS) to be set up in J&K, Punjab, Tamil Nadu, Himachal Pradesh and Assam. Also AIIMS like institutions to be set up in Bihar.
- A post graduate institute of Horticulture Research & Education is to be set up in Amritsar.
- 3 new National Institute of Pharmaceuticals Education and Research in Maharashtra, Rajasthan & Chattisgarh and one institute of Science and Education Research is to be set up in Nagaland & Orissa each.
- Rail Budget hiked freight rates for cement by an average of 2.7% and Coal by 6.3%. The rise in prices of coal due to hike in freight rate could also increase input cost for cement makers.
Stocks to watch
ACC, Ambuja Cements, India Cements, Shree Cement, Ultra Tech Cement
Outlook
The Budget is positive for the cement sector as it benefited from government thrust on affordable housing, roof for all, Swachh Bharat programme, and increase in expenditures for infrastructure development. Also, continued exemptions for individual tax payers will help indirectly to the industry.
