India's 2009-2010 interim budget disappoints polymer players

17 February 2009 09:54  [Source: ICIS news]

SINGAPORE (ICIS news)--India's interim budget for 2009-2010 has disappointed polymer producers because it does not offer a stimulus package to the local petrochemical sector, industry sources said on Tuesday.

The budget, announced on 16 February ahead of the general election to be held by May, failed to provide any measures to resuscitate India's slowing construction and automotive sectors, which are key demand drivers for the polymer industry, polymer producers said.

In addition, the Indian government has not offered any tax reductions to the corporate sector to help it during the current economic slowdown, one of the producers said.

“We are disappointed, of course, because the budget doesn’t offer us relief, although it includes some measures to help accelerate rural development, which will help the ruling party garner votes in the elections,” it said.

Industry players had been expecting a cut in excise duty (central value added tax, or CENVAT) to 8% from the current 10%, said a polymer trader.

“This would have provided a bit of immediate relief to the industry. Instead, the government has announced some investment into the infrastructure segment, which will take a long time to have an impact,” he said.

The polyvinyl chloride (PVC) industry, which has been affected by the slowdown in the construction segment, had been hoping the budget would come up with some measures to boost house sales.

“This has not happened, so we are very disappointed,” said a PVC converter.

India's GDP is expected to slow to 7.1% in 2008-2009, down from growth of 9% last year.

To discuss issues facing the chemical industry go to ICIS connect

By: Prema Viswanathan
+65 6780 4359

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly