The Central government's continued focus on infrastructure development, affordable housing, smart cities, concrete roads and highways coupled with remonetisation and the structural reforms such as GST is expected to boost demand post monsoon-related sluggishness. Incremental cost pressures have subsided but price realizations growth can be volatile and patchy.

With the GST slated to be implemented in July 2017, the cement sector at 28% GST slab as against around 22-25% the existing indirect tax incidence. On the brighter side, the GST Council has maintained a lower rate of 5% on key inputs like limestone, sand, gypsum and iron ore, which could support cement manufacturers to maintain procurement cost, which may be favourable by virtue of anti-profiteering clause. Also, lower tax on transport sector could benefit cement companies with lower freight costs, going forward.

With the forecast of normal rains in the Monsoons and increased domestic consumption and higher capacity utilisation, the private Investment cycle is expected to rebound during the year. As in previous years, Union Budget for FY 2018 has its thrust on raising public investment, infrastructure and affordable housing which has been accorded infrastructure status. This along with the projected favourable economic environment is expected to increase the demand for cement and result in higher capacity utilisation. Also, with several legislations being put in place to promote recovery and growth like Housing for all by 2022, Smart-cities, broadening the financial inclusion and with the passage of GST, it is expected that the overall cement demand outlook in the country remain positive for the medium to long term.