What the Budget does

• A Rs 60,000 crore debt relief package scheme for farmers
• An outlay of Rs 280,000 crore for agricultural credit
• Greater emphasis on irrigation projects
• Customs duty on phosphoric acid to be reduced from 7.5% to 5%
• Naphtha used in the fertiliser industry to be exempt from customs duty
• Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary

Also read: How Budget affects your stocks

Impact on sector

• Higher agricultural credit disbursement and farmer debt relief package will help drive demand for fertilisers
• Increased outlay towards irrigation projects will bring more acreage under cultivation thus driving the demand for fertilisers
• Reduction of customs duty on phosphoric acid will help bring down the cost of phosphatic fertilisers
• Customs duty exemption on Naphtha imports will also help bring down cost of fertiliser manufacturing

Impact on companies

• Greater emphasis on irrigation and concession to farmers is a positive for all fertiliser companies in India
• Reduction in customs duty on phosphoric acid will benefit phosphatic fertiliser players like Tata Chemicals [Get Quote] and Coromandel Fertilisers

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