Budget 2024 Chemical Sector Update
This article delves into chemical sector related news from budgetary speech made by Hon Fin Minister Nirmala Sitharaman.
Budget 2024 Chemical Sector Update: Strategic Shifts in Allocations
In the recently unveiled Budget estimates for 2024-2025, the chemical sector undergoes a notable realignment, reflecting shifts in priorities and allocations as compared to Budget 2023-2024. The Ministry of Chemicals and Fertilizers faces a 5.7 per cent reduction in its budget, dropping from Rs1,78,481.99 crores to Rs 1,68,379.81 crores. This reduction suggests a recalibration of financial focus within the ministry.
However, within the sector, specific departments witness varied trajectories. The Department of Chemicals and Petrochemicals experiences a substantial decline of 19.8 per cent, with its allocation decreasing from Rs173.45 crores to Rs139.05 crores. Similarly, the Department of Fertilisers sees a 6.3 per cent decrease, moving from Rs1,75,148.48 crores to Rs1,64,150.81 crores.
In contrast, the Department of Pharmaceuticals emerges as a focal point with a significant increase of 29.4 per cent. The budget for this department rises from Rs3,160.06 crores to Rs4,089.95 crores, indicating a strategic emphasis on pharmaceutical initiatives.
| Budget Estimates |
2023-2024 |
2024-2025 |
% Change |
| Ministry of Chemicals and Fertilizers |
1,78,481.99 |
1,68,379.81 |
-5.7% |
| Department of Chemicals and Petrochemicals |
173.45 |
139.05 |
-19.8% |
| Department of Fertilisers |
1,75,148.48
|
1,64,150.81 |
-6.3% |
| Department of Pharmaceuticals |
3,160.06
|
4,089.95 |
29.4% |
| (Figures in Rs crore) |
The budget announcement also reveals a broader vision for the chemical sector, aligning with key national priorities:
- E-Vehicle Ecosystem Boost: The government aims to expand and strengthen the electric vehicle (e-vehicle) ecosystem by supporting manufacturing and charging infrastructure. A particular focus lies on encouraging the greater adoption of e-buses for public transport networks through a payment security mechanism. This initiative is expected to positively impact various specialty chemicals, including construction chemicals and chemicals used in manufacturing batteries and other ev components.
- Green Growth Initiatives: In a bid to promote green growth, the budget introduces a new scheme for bio-manufacturing and bio-foundry. This scheme targets the production of environmentally friendly alternatives such as biodegradable polymers, bio-plastics, bio-pharmaceuticals, and Bio-Agri-inputs. The shift towards regenerative principles in manufacturing is a significant step towards sustainable practices.
- Towards 'Net-Zero' Commitment: The budget aligns with the commitment for 'net-zero' emissions by 2070, introducing several measures:
- Viability gap funding for harnessing offshore wind energy potential, starting with an initial capacity of one gigawatt.
- Setting up coal gasification and liquefaction capacity of 100 million tonnes by 2030, aiming to reduce imports of natural gas, methanol, and ammonia.
- Phased mandatory blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes.
This move not only supports green chemistry products but also aligns with Environmental, Social, and Governance (ESG) initiatives undertaken by chemical companies.
In conclusion, the budget for the chemical sector in 2024 reflects a nuanced approach, balancing reductions in certain areas with strategic increases in others. The emphasis on green initiatives and alignment with global sustainability goals signals a proactive stance towards fostering a more environmentally conscious and resilient chemical industry.
Disclaimer: The article is for informational purposes only and not investment advice.