The Indian finance ministry has hiked capital expenditure on infrastructure development by 33% on-year to INR 10 lakh crores ($1.22 trillion) in its fiscal-year-though-March-2024 (FY24) budget, prompting a positive steel industry response.

This expenditure will amount to 3.3% of total Indian GDP, finance minister Nirmala Sitharaman announced during the budget release.

The minister also announced a capital outlay of INR 2.4 lakh crore for Indian Railways, the highest-ever allocation since FY14.

"A progressive ‘Saptarishi’ Budget – the first in [Indian government vision] Amrit Kaal – has hit the right notes to fuel growth across industries and propel India to become a global manufacturing hub,” president of the Indian Steel Association (ISA) and AMNS India chief executive Dilip Oommen tells Kallanish.

“A significant 33% increase in capital expenditure to INR 10 lakh crore – 3.3 % of the GDP, thrust to fast-track infrastructure development, and the highest ever INR 2.4 lakh crore for railways will translate into robust domestic steel demand, thus spurring private investments and job creations,” he adds.

“First and last-mile connectivity for sectors like steel, ports, coal, etc. with an investment of INR 75,000 crore will improve logistics efficiency. This Budget is focused on growth and improving consumption. At the same time, there is a focus on the green economy and digitalisation,” Oommen notes. “The Budget underpins a long-term plan that shows the right path to drive economic revival at a time when advanced economies are facing a tough time.”

ISA secretary general Alok Sahay, meanwhile, observes: “India delivered a pro-growth budget highlighting the significance of sustainable development with a strong focus on infrastructure spending and financial support to MSMEs.”

JSW Steel chairman Sajjan Jindal comments: “A 40% increase in the income tax rebate limit from 5 lakhs to 7 lakhs is a huge comfort that this budget has given to our middle-income group and is a great step to strengthen their finances.” This will likely result in more consumer spending on steel-containing products.

“The scheme to support central and state government and municipalities in replacing their old polluting vehicles is another master stroke. This will give a boost to the manufacturing sector which is largely driven by the auto industry and will bring more efficient machines onto the road,” he adds.

“We are the only bright spot in the world economy and this budget ensures that we continue to shine,” Jindal concludes.