For the steel industry, the Budget is double-edged. Proposals and allocations show a clear path for increased steel demand.

However, the increase in custom duty on imported metallurgical coal will have an adverse impact on the cost of production. Given the shortage of metallurgical coal in India, it was rather surprising and disappointing. And if that is not enough, there is a possibility of rise in iron ore prices with the proposed change in royalty payments on mining.

A little sweetener has been added by the reduction of import duty on limestone and dolomite.

The Union Budget proposal presented by the Finance Minister sets the future direction for the economy. Given the time constraint in presenting the Budget, the Finance Minister has done an excellent job in fiscal consolidation through containing fiscal deficit at 4.1 per cent of the GDP for the current year and reducing it to 3 per cent over the years.

The government has made a budget provision of Rs. 11,600 crore for the development of ports and harbours. There is a focus to promote the Indian shipbuilding industry. This will boost economic growth, besides creating employment.

The extension of tax holiday to the power sector, renewable energy and enhancing domestic coal production are all measures that will enhance industrial production to make them more competitive.

The definite timeline for GST (Goods and Services Tax) roll out, reducing import duties on certain raw material and levy of export duty on certain raw materials, reduction on excise duty on food processing, are measures that will boost manufacturing.

In terms of exploitation of natural resources, the budget envisages acceleration of Coal Bed Methane reserves and use of modern technology to revive old or closed wells.

(The writer is the Executive Vice-Chairman of Essar Steel India)