The government’s proposed tax cuts combined with an uptick in consumption during the festive season would improve the demand situation in the second half of the fiscal year 2019-2020, said TV Narendran, MD of Tata Steel.
The corporate tax rate decision was very positive and in line with what the industry has been talking about, he said.
“It helps companies like us who are investing a lot currently in India because we also have the pressure to deleverage. So actions like this help us in that context,” Narendran added.
Besides tax benefits and festive season, Narendran said the government’s spending on infrastructure will also boost earnings. “We also hope that the infrastructure spend that the government has been talking about will start translating into money flows on the ground so that should help us,” he said.
Compared to South-East Asia, the Middle East or Europe, India has been a big price setter as the country has been exporting a fair amount of steel, said Narendran.
“So if things pick up in India, we believe that steel prices globally can also be positively impacted – microeconomic activity, various governments are taking different steps and we hope we will see the impact of those actions across the world,” he further mentioned.