Indian cement industry can dream big, thanks to Union Budget 2024 largesse

The Rs. 11 lakh crore capital expenditure announcement in the Union Budget 2024 signifies the government's commitment to modernise India’s infrastructure through various projects and allocations, which will undoubtedly drive demand for cement and other building materials. These initiatives collectively illustrate the budget's comprehensive and strategic approach to bolstering India's infrastructure across various sectors. Modi 3.0 government estimates an investment of nearly Rs. 10 lakh crore under PMAY-U 2.0 for an additional one crore affordable houses over the next five years.

The central assistance of Rs. 2.2 lakh per house announced in the Budget is higher than the Rs. 1.5 lakh per house disbursed in the last eight years. The three crore additional houses planned under PM Awas Yojana will boost demand for cement. Allocations under PMAY-U and Pradhan Mantri Awas Yojana-Gramin are higher than the revised estimates of fiscal 2024 by close to 36 per cent and nearly 70 per cent, respectively. This will translate to demand for nearly 20 million tonnes of cement. Moreover, allocations under PMAY-U and PMAY-G are nearly 15 per cent and nearly eight per cent higher than the allocations in the interim budget.

Under the Pradhan Mantri Gram Sadak Yojana, the launch of phase-IV to provide all-weather connectivity to 25,000 villages is also a positive development for the sector, which will support incremental demand for cement. Given that housing forms 55-60 per cent of total cement demand, the impetus through the Pradhan Mantri Awas Yojana will keep cement demand on track for 7-8 per cent growth in the current fiscal, state researchers at CRISIL. Meanwhile, it is not without reason that the Cement Manufacturers’ Association (CMA) has hailed the Union Budget 2024-25.

According to them, the budget gave a commendable vision for India’s economic growth with a strong emphasis on infrastructure development, employment generation and energy security. Against the backdrop of global uncertainties and inflation, the budget is transformative and forward looking with an eye on fiscal consolidation. Additionally, the cement industry is in alignment with the Centre’s net zero goals. The transition roadmap for 'hard to abate' industries to move from the 'Perform, Achieve and Trade' mode to the 'Indian Carbon Market' mode is also a welcome step. The roadmap will further boost India’s energy infrastructure and encourage renewable energy adoption.

Overall, the budget is a win-win for both the economy and the environment, and the cement industry is poised to play a pivotal role in the nation’s development journey. The Prime Minister's package, with its emphasis on skilling and employment linked incentives, will not only enhance workforce capabilities but also generate new job opportunities within the cement sector. As the cement industry is transitioning and adapting to newer technologies, India needs a workforce that is skilled and equipped.

The allocation of Rs. 1.48 lakh crore for education, employment, and skilling initiatives will hugely impact creation of a skilled workforce that can contribute effectively to the cement Industry. The cement industry is a major contributor to employment generation in India. And now, it will have to remain committed to supporting these efforts through innovation and sustainable practices. Only then can the country expect the most productive results.