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Pakistan’s federal budget 2021/22 benefits the cement industry

Pakistan’s finance minister, Shaukat Tarin, presented a federal budget of 8.48 trillion PKR (US $ 54 billion) from 2021 to 2010 at parliament last week. The government has set a GDP growth target of 4.8%, compared to the expected 3.9% for the next fiscal year. In addition, Islamabad has allocated significant funding to the Public Sector Development Program (PSDP). These indirect incentives are driving Pakistan’s cement industry. Research experts unanimously believe in a neutral to positive budget for the cement industry.

Analysts said the government allocated PSDP to 2,135 billion PKR (highest ever, federal PSDP secured 650 billion PKR last year compared to 650 billion PKR last year, securing 123.5 billion PKR for the state) to drive national development. He said it should drive cement demand.

In addition, the National Highway Office allocated PKR114bn vs. PKR118bn in 2009 (actual spending on 10MFY21 set on PKR79bn, according to the Planning Committee, suggests a 44% increase in allocation this year). In addition, a PKR300bn subsidy has been allocated to the Naya Pakistan Housing Authority, alongside the PKR30bn for the Naya Pakistan markup subsidy, which should stimulate construction demand.

In addition, PKR57bn, PKR23bn, PKR6bn, and PKR14bn are reserved for the Dasu, Diamir-Bhasha, Mohmand, and Neelum Jhelum dams, and working with those colonies should significantly increase cement demand.

The Association of All Pakistan Cement Manufacturers (APCMA) has not yet commented on the benefits of financial measures. However, it has appealed to the government to abolish FEDs, reduce other tariffs and taxes, and provide manufacturers with the opportunity to control production costs and further optimize / expand their factories. This is the government. Similarly, AHCML Research raised the question that tariffs on corporate income tax, fuel, and coal should be reduced to support the cement industry.

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