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INDUSTRY'S REACTION ON THE INTERIM BUDGET

MagicBricks, 17th Feb'2014

Anil Kumar Sharma, president, CREDAI NCR: “The interim budget seems to have overlooked the suggestions forwarded by the real estate developers. Apart from some respite in duty for construction sector and Rs. 2000 crore for the Urban Housing Fund Allocation, the budget was silent on the issues presently being faced by the real estate sector. The respite in interest rates and taxes could have helped the FM to meet the target GDP growth as the real estate sector is one of the leading growth drivers today, however, an interim budget has its limitations.”

Anshuman Magazine, chairman & managing director, CBRE South Asia Pvt Ltd: “As a vote on account, the Hon. Finance Minister made all the right pushes for infrastructure, manufacturing, and housing in the Interim Budget 2014-15, presented on February 17, 2014. Since the current government presenting the budget will be in house for just about a month-and-a-half, the Finance Minister has, in essence, set the framework for the next government’s fiscal plan. As part of the vision for the future of the country, the Finance Minister mentioned massive investment in infrastructure to be mobilized through the Public-Private Partnership mode. Moreover, the manufacturing sector has been envisioned as the base of India’s development. Consequently, all taxes, Central and State that go into an exported product are proposed to be waived or rebated. According to the Interim Budget announcement, there should be a minimum tariff protection to incentivize domestic manufacturing in the country. Furthermore, urbanization is proposed to be managed to make our cities governable and livable.”

A key push was given to the infrastructure and housing sectors, with:
• Budgetary support to the Railways increased to INR 29,000 crore for 2014-15
• New instruments and mechanisms to raise funds for Railway projects proposed to be identified
• Three more Industrial Corridors connecting Chennai and Bengaluru, Bengaluru and Mumbai, and Amritsar and Kolkata currently being under different preparatory stages
• The loading and un-loading, packing, storage and warehousing of rice being exempted from Service Tax
• INR 6,000 crore provided to the Rural Housing Fund, while INR 2,000 crore allocated to the Urban Housing Fund (NHB is yet to launch the latter)

“He also provided impetus to the manufacturing industry with key announcements, including the establishment of eight National Investment and Manufacturing Zones (NIMZ) along the Delhi Mumbai Industrial Corridor (DMIC), with nine projects already approved by the DMIC trust. In addition, notification of a public procurement policy, establishing technology and common facility centers, and launching the Khadi Mark are steps taken to promote micro, small, and medium enterprises. Having presented the roadmap ahead, the crux now lies on implementation. Let us hope that the next government will work towards implementing these key policies.“

Ajay Aggarwal, managing director, Microtek Infrastructure: “We were not expecting any significant announcement to push growth in the real estate sector as interim budgets are not meant for that. A quick look at major announcement says that respite on duty for construction sector and allocation for the Urban Housing Fund are something to cheer about. We are now looking forward to budget by the next government for the clarity on the policy front.”

Sumit Berry, MD, BDI Group:
“The Budget 2014 being a vote on account budget instead of a full-fledged one, it is difficult to expect any concrete measures. Yet, the real estate sector is under tremendous pressure and the government should face these pressing issues immediately. However, the government has encouraged public–private partnership in the infrastructure industry. This is a good move as private players will get a chance to build solid infrastructure by teaming up with government bodies.”

Kaushal Jain, MD, Arihant Group: As expected, there was no announcement on new policies and measures as this was an interim budget. So our hopes are pinned on the new government which is going to come into power in the next couple of months. The real estate regulatory bill must be activated at the earliest and so is the real estate investment trust (REIT). The realty sector needs impetus from the government to boost its confidence.

Gaurav Gupta, Director, SG Estates Ltd: Due to the coming elections, one cannot expect any revolutionary changes to take place in the budget. But if the government reduces the burden of various taxes on the common man, the homebuyers will be provided some succor as they can save money and plan on purchasing property. Also, a single-window clearance for project approvals must be granted to boost transparency and save time. If REIT’s are given a go ahead, then it will become easier for the person with limited funds to invest in Income generating real estate. Also it will ease the liquidity of the developers.

Rajesh Goyal, MD, RG Group: The Interim Budget announced by the govt. on Monday came with a disappointment amongst the developers. We were expecting some relief in terms of decrease in Interest Rates on Home Loan and some clarity on regulatory bill when to be applied and whether some changes have been made as per the suggestions given by real estate industry but there has been no such announcement made. In my view we all have to still go through this on going liquidity crunch and wait for more few months for some good hope for the sector.

Alok Tyagi, CMD, ATN Group: The issues for real estate sector are more critical and were expected to over looked by the financial minister. No such relief was given to the home loan interest rates and nothing has been said about the introduction of REIT’s in 2014 which might had resolved some issues of liquidity crunch in the sector. The current slow down may continue for few more months till we have the actual budget by the new govt. after loksabha elections.

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