Bhubaneswar, Feb 26 (IANS) The union budget for 2010-11 is largely neutral for the steel industry, Tata Steel managing director H.M. Nerurkar Friday said.

'This budget is largely neutral for the steel industry and Tata Steel, but does contain other growth measures which may have an indirect effect on the steel demand,' Nerurkar said in a statement.

'Increase in petro-fuel and energy costs, however, may have an inflationary impact on consumers or margin squeeze for suppliers,' he said.

'Similarly, roll-back of excise duties to 10 per cent will partially negate the impetus given to infrastructure and construction due to rise in cost of steel, cement and power,' he said.

Nerurkar said the clean energy cess on domestic and imported coal will also have an impact on the user industries, and that he was expecting the government to encourage capital spending in large projects by extending investment linked incentives to more sectors like steel.