Budget 2012: Capital goods sector's hopes dashed

The Budget has failed to provide relief to the capital goods sector, which has been grappling with issues such as availability of coal, land acquisitions and environmental clearances.

Manufacturers such as BHEL and Thermax, which have been sitting on idle capacities because of cheap imports of power equipment from Chinese and Korean markets, were in for disappointment because the Budget did not seek to create a level-playing field between them and their Chinese rivals.

Despite the Committee of Secretaries’ recommendation last month of imposition of import duty on such equipment, the Budget did not address this issue.

That explains why stock prices of a few capital goods companies, which were up nearly 3% at the beginning of the budget speech, had plunged into the red by the time the finance minister finished.