India stands second in the world’s largest producers of cement. This is the main reason why cement has such a vital significance in the Indian economy. Being among the largest manufacturers also means that it is one of the largest employers providing employment opportunities to millions of people across the country.
The cement industry was deregulated (lifting barriers and restrictions on the industry) in 1982. This has resulted in positive changes in the industry as a lot of FDIs (Foreign Direct Investments) came in. Indian players too got a chance to invest in the cement sector thus giving a boost to the economy.
According to the predictions made by India Brand Equity Foundation (IBEF) the industry is expected to grow exponentially especially playing a vital role in the construction and infrastructure sector. With 98 major smart cities being in the future plans of development, it is obvious that the cement industry will be booming in the future.
The suitable foreign policies have made it possible for foreign players like Heidelberg Cement and Lafarge-Holcim to invest in the country recently. Another important thing or factor that keeps this industry running and thriving is the continuous and perpetual supply of raw materials to make cement i.e. limestone and coal.
The industry’s market size stood at a whopping 278.79 million tonnes as on April 2019 – January 2020.
Initiatives by Government:
While the cement industry might see a slowdown due to the COVID-19 pandemic as people are not buying houses, the Government is doing everything it can to boost the cement sector as it knows the vital role it plays in the country’s overall development. Hence, the Government has allowed the private players to invest in the sector to boost the sector’s growth.
Also, there are many plans introduced by the Government like announcing the extension of benefits under Section 80 – IBA of the Income Tax Act till March 2020 to encourage people to buy houses at affordable prices. This was announced in the Union Budget of 2020-21.
Moreover, the Union Budget has allocated INR 139 billion for Urban Rejuvenation Mission: AMRUT and Smart Cities Mission. This mission along with Swachh Bharat Abhiyan and affordable housing plans will definitely boost the Cement industry.
Also, another budget of INR 27,500 crores has been allocated under the Pradhan Mantri Aawas Yojana in Union Budget of 2020-21. The Government will also upgrade the road length of 1,25,000 kms over the next five years.
Due to the increase in demand from sectors like Housing, Infrastructure and Commercial Construction, the cement industry is expected to reach 550-600 Million Tonnes per Annum (MTPA) by the year 2025.
All these plans and schemes will surely give a major boost to the cement industry as the economy will grow if there is growth in infrastructure and development. And this is possible only through the cement industry.