Demand for commodities like cement, iron, copper, aluminum will increase...

- Bhoo Bazar : Dilip Shah

- Vote on account will also have the same effect as the full budget: Government will maintain the importance given to infra and agriculture sector in the interim budget.

As Lok Sabha elections will be held in the country in the current calendar year, this time on February 1, not the full budget, but vote on account will be presented. Even the complete budget is not the same now, because instead of making announcements in the annual budget, the government makes announcements of some important schemes and programs in the middle of the year. Thus the interim budget will have an impact on the stock market, but the commodity market does not seem to have much of an impact. Even so, analysts are making different estimates about the effect that the government might have if it makes populist announcements in the run-up to elections.

First of all, it should be noted that the government has undertaken an ambitious project to settle everyone in their own homes in the country. The government is likely to allocate Rs 1 trillion for the next financial year for the low-cost housing scheme. A provision of 790 billion rupees was made for this scheme in the previous budget. According to the internal estimates of the government, there is still a need to build 2 crore houses in the rural areas of the country. In urban areas, this proportion is 15 lakh houses. The central and state governments have spent 29 billion dollars on this scheme in the last five years and it has been decided to extend the scheme further. In this scenario, the demand for essential commodities for the construction sector is expected to remain unchanged. Among these commodities, the demand for cement, iron, steel, copper, aluminum will continue. Demand for cement has slowed in recent times, but apart from housing, demand for cement and iron is expected to remain high in the infrastructure sector as well.

It should also be mentioned here that since the demand in rural areas is still not increasing as much as desired, the Finance Minister can announce measures to increase rural demand. It includes schemes for agriculture sector besides housing. Also, demand for iron and steel will remain high as railways continue to grow. It can be seen from the current incident in Maldives that the Prime Minister himself is trying to develop more tourism sectors in the country. In this, tourism related activities will increase and hence the demand for agricultural products and processed food is expected to be high. Demand for cement, iron and steel will also be high for the construction of new hotels in tourist areas.

As India is slated to become a five trillion dollar economy, demand in the country remains high and government spending in sectors including infrastructure is essential. Taking this policy forward, the Union Finance Minister is likely to announce schemes that will increase government spending. It is also important to advertise schemes for the purpose of helping in elections. Apart from this, further improvements are likely to come in the oil and gas sector. There may be some announcements for the development of renewable energy in the country. The commodities used for it include copper, silver and aluminium. Thus, the demand for these metals is also likely to increase.

For the agriculture sector, it has to be said that in the last two out of three years, the percentage of grace value added of agriculture in the country's economy has been around 20 percent. Last year this proportion was 18.3 percent. Hence the government will provide incentives for agricultural production as well as processing of agricultural products.

The government will also try to promote schemes like Make in India, so that new industries will be created, for which cement, iron, copper, aluminum will be required.

In short, whether the budget is complete like every year or only on vote on account, the work has to move forward in the direction decided by the government. Also, since the BJP seems likely to mandate Narendra Modi to be the Prime Minister again, there is a possibility of an increase, not a decrease, in the government schemes. Thus, demand in India is expected to remain high for many commodities.