Budget 2013: Housing loan rebate will boost home ownership and steel demand

KOLKATA: The Finance Minister’s budget proposal to offer an additional interest deduction of Rs 1 lakh on housing loans of upto Rs 25 lakh taken by first time home buyers from housing finance companies and banks will increase demand for steel and cement and help boost new home ownership. The move is clearly aimed at raising the demand for core sector commodities like steel and cement which has been facing sluggish growth in the recent months.

“The budget move will definitely see a perk up in housing construction activity. This will indirectly boost steel demand since a lot of it is used in construction. This will benefit domestic steel companies which are struggling with recent low demand,” Sanjeev Jain, Partner (Metals & Mining) at Ernst & Young.

Construction sector is one of the biggest consumers of steel in the country. In particular the budget proposal will create demand for long steel products like TMT bars and rods, angles and channels that find use in construction activity. This will benefit that only large steel companies like Steel Authority of India Limited (SAIL), Tata Steel, RINL but also come as a shot in the arm for a host of mid-sized steelmakers and TMT manufacturers like SRMB, Shyam Steel.