What the Budget does
- A Rs 60,000 crore debt relief package scheme for farmers
- An outlay of Rs 280,000 crore for agricultural credit
- Greater emphasis on irrigation projects
- Customs duty on phosphoric acid to be reduced from 7.5% to 5%
- Naphtha used in the fertiliser industry to be exempt from customs duty
- Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary
Also read: How Budget affects your stocks
Impact on sector
- Higher agricultural credit disbursement and farmer debt relief package will help drive demand for fertilisers
- Increased outlay towards irrigation projects will bring more acreage under cultivation thus driving the demand for fertilisers
- Reduction of customs duty on phosphoric acid will help bring down the cost of phosphatic fertilisers
- Customs duty exemption on Naphtha imports will also help bring down cost of fertiliser manufacturing
Impact on companies
- Greater emphasis on irrigation and concession to farmers is a positive for all fertiliser companies in India
- Reduction in customs duty on phosphoric acid will benefit phosphatic fertiliser players like Tata Chemicals and Coromandel Fertilisers
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