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Budget 2024: Check What Cement Industry Wants From The Modi Government | Companies News

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Budget 2024: Check What Cement Industry Wants From The Modi Government | Companies News

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With the eagerly anticipated Indian budget set to be unveiled on February 1, 2024, the cement industry is poised for a pivotal moment, hoping for budgetary measures that align with India’s growth trajectory, particularly in the realms of infrastructure development, construction, and affordable housing. The industry is keenly expecting initiatives that will support competitive pricing for raw materials and energy sources, crucial factors for the robust growth of the Indian cement sector.

Expressing optimism, Jayakumar Krishnaswamy, Managing Director of Nuvoco Vistas Corp. Ltd., said, “The cement industry showed resilience and highlighted its role in economic progress. India’s cement demand is rising steadily, driven by the infrastructure and affordable housing sectors. It was a year of strategic shifts in the cement industry as the sector embraced environmental consciousness and adopted sustainable practices.”

Nuvoco Vistas Corporation Limited (Nuvoco) is a part of business conglomerate – Nirma Group and is the fifth-largest cement group in India. Citing a Knight Frank report, Krishnaswamy said the construction sector in India is estimated to employ 100 million people by 2030, up from 70.6 million, with the output reaching $1 trillion from the current $650 billion. 

“Cement volumes witnessed a rise of 9-10% in 2023-24, driven by demand from infrastructure and urban housing, as noted by ICRA in October, with a notable 11-12% year-on-year increase in the first half of the year. We look forward to witnessing measures aligning with India’s growth trajectory, particularly in infrastructure development and affordable housing. An emphasis on maintaining competitive prices for raw materials and energy sources will significantly boost the Indian cement sector. We also remain hopeful of receiving sustained support through fiscal incentives and streamlined freight mechanisms, essential for thrusting the cement industry forward. Additionally, a user-friendly and incentivised renewable energy policy will play a critical role in fostering sustainable growth,” he said.

Industry bodies like the Confederation of Indian Industry (CII) are recommending a focus on enhancing quality and productivity in manufacturing, coupled with the launch of a National Mission for Advanced Manufacturing. The government is urged to improve preparedness for Industry 4.0, create Industry 4.0 innovation hubs in industrial clusters, and continue prioritizing ease of doing business and reducing the cost of doing business.

India, as the second-largest cement producer globally, holds over 8% of the global installed capacity, with 98% of it in the private sector. The top 20 companies contribute to approximately 70% of the total cement production in India, leveraging the country’s abundant and high-quality limestone deposits for potential growth.

Cement production in India is expected to increase at a CAGR of 5.65% between 2016-22, driven by demands in roads, urban infrastructure, and commercial real estate. Industry players estimate that India’s cement production is expected to grow by 7-8%, driven by infrastructure-led investments and mass residential projects. Both fiscal and structural reforms by the government would help the industry in higher productivity, capacity building, and expansion.  The industry is expected to expand at a CAGR of 4-5% over the next four years, reaching 715-725 MT/year in installed capacity by the end of FY27.

As the industry eagerly awaits the budget, stakeholders are optimistic about the transformative measures that could propel the Indian cement sector to new heights of growth and sustainability.

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