New Government brings optimism in Steel and Infra Sector

The strong impetus this government has given to infrastructure development created much noise in the steel and infrastructure space, especially for TMT steel manufacturers. Though the details of the upcoming Budget are still under wraps, the focus on infrastructure is an excellent precursor to its prospects of growth.

While one of the most exciting decisions taken by the newly formed government for the steel industry certainly has to be expanding the Pradhan Mantri Awas Yojana scheme.

We at Kamdhenu Limited are pretty optimistic regarding the impact. Cabinet has sanctioned, in its first sitting, support for constructing three crore houses under Pradhan Mantri Awas Yojana in both urban and rural areas of the country. Any such huge jump in housing projects would directly be reflected in demand for TMT steel bars. As, a leading manufacturer of steel and TMT bars in India, we are bullish on the positive outlook for the steel sector. Buoyed by the government’s focus on infrastructure development, we have planned to double our manufacturing capacity of TMT products in the next 5 years.

The government has not restricted itself to the housing sector; instead, it is investing in infrastructure initiatives like road and bridge construction and is pursuing urban development projects. It will most likely trickle down to all players in the TMT steel and construction value chain. Not only steel producers but also cement manufacturers, construction companies as well as logistics providers will feel a positive ripple effect.

While now the focus is going to be on Infrastructural development, it will also be pertinent to take cognizance of logistic challenges. High costs of transportation, which also at times play a significant role in affecting project execution time and expense, are already common. There is, however, cautious optimism due to government initiatives like Sagarmala, Bharatmala, and UDAN RCS, targeting better logistics infrastructure and smoother freight movement—it will eventually bring down the cost of transportation and raise project execution efficiency.

In particular, the industry is buoyed by the perception that this focus on the infrastructure of the new government could indeed be a vision for the long term and not a policy short-term measure. Joined with probable enhancements in the logistics pace, this sort of responsi-bility shall create an environment predictable and stable for investment in the TMT steel and construction sector. Even though the modality of plans and budgetary provisions relating to its intention is yet to emerge from this government, this laying of first develop-ment priority has created a sense of optimism in the steel and infrastructure sector. We, as industry stakeholders, would await with bated breath how these eventually concretize. We believe there is enormous potential for government-private sector collaboration, which will guarantee success in these initiatives. This collaborative approach can set in its stride a phase of continuous growth in the TMT steel and construction segment, thereby taking India closer to attaining its priorities concerning infrastructural development.

Kamdhenu Limited
Email: kamdhenu@kamdhenulimited.com
Web : www.kamdhenulimited.com