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Cement cos expect higher govt spend on infra post-Budget

January 8: A majority of Indian cement-makers expect that the Government of India will announce a slew of measures, including higher spending on infrastructure projects, in the coming Union Budget proposals for 2015-16 to give a boost to the economy.

Right now it appears that the government is conserving the funds saved out of low spending on crude oil imports, said an official from a leading cement company.

“The benefit of softness in crude oil prices, which has gone to the government, is being conserved and not being released. The allocation of these funds to various infrastructure project would be done in the Budget. Once that is done, that will give a boost to the economy,” the official said.

The industry depends a lot on infrastructure spending by the government as well as the private sector. During the past nearly two years, there was practically nil spending by the government on infrastructure projects and that had affected growth of companies in steel and cement, industry sources said.

Asked about his views on the future movement in crude oil prices, the official said, “You cannot change the economic situation of a country, whatever crude oil prices are at. If there is a boost to the economy, the growth rate will automatically go up. However,
I do not see any immediate change in the current soft trend in crude oil prices. Advantages which countries like India are enjoying today will not immediately change to disadvantages.”