Steel to be in demand after government decides to give tax benefits to real estate

The government's proposal to extend tax sops given to real estate firms for developing affordable housing until next fiscal will boost demand of long steel products, Secondary steel industry body AIIFA said Friday. Presenting the Interim Budget for 2019-20 in the Lok Sabha, Finance Minister Piyush Goyal said benefits under Section 80-IBA of the Income Tax Act are being extended for one more year to housing projects approved till March next year. This proposal would boost supply of affordable housing.

"The announcements related to developing affordable housing until next fiscal will boost the demand of long steel products like TMT bars etc in the country," All India Induction Furnaces Association (AIIFA) Secretary General Kamal Agarwal said. The government also announced that capital gains of up to Rs 2 crore could be rolled over for investment in two housing units from the current one unit only. It also exempted tax on notional rent on a second self-occupied house.

The AIIFA represents electric induction melting furnace industry which produces products like mild steels, low alloy steels and stainless steels, among others. Sponge Iron Manufacturers Association said it sees the Budget as positive step for the welfare of middle income group.

"We welcome the Budget. It is a good Budget it will result in an inclusive growth of all industries including sponge iron," its Executive Director Deependra Kashiva said. Material Recycling Association of India (MRAI), which represents over 900 members of the country's ferrous and non-ferrous metals recycling industry, said the government has gone extra mile for the farmers and middle class.

"The budget is no doubt a very good one for small scale businesses. Recycling industry is a growing industry in India and players' don't have a big set ups. The wages are also not that high but with the tax relief given, more units will come up," MRAI President Sanjay Mehta said.

(With inputs from agencies.)