As Union Minister Nirmala Sitharaman prepares to present her maiden budget, India’s journey to a five-trillion dollar economy by 2024 must begin with a series of small steps. Healthcare, education, public infrastructure, lower GST in sectors like real-estate, single window clearances for business and government divestment from failing enterprises, making way for private players is the way forward. Experts talk to DC
Declare real estate sector an industry: Experts
Austin Roach,
President, CREDAI Karnataka on real estate sector
The real estate industry has been swayed by major changes like RERA, GST and demonetization, during the previous tenure of the Modi government. This time around, we’re expecting more sops. Now, the Union Budget is the gospel as far as the Indian economy is concerned and the realty sector happens to be the second-largest contributor to GDP. The slew of reforms in the last couple of years has reinstated the confidence of buyers and the sector is attracting foreign investors in the country, thereby contributing to its wholesome growth.
The Union Budget, the first to be presented by the new Union Finance minister Nirmala Sitharaman, is already drawing lot of attention from India Inc, who expect a real game-changer for the economy as well as job creation, an aspect that was overlooked during PM Modi’s first term. Industry leaders are optimistic that the second innings of the Modi government will bring new reforms and address the concerns and issues of the realty industry.
As the apex body of developers and real estate fraternity – CREDAI expects the government to look into the following demands of the realtors to boost the sector.:
Reduction in GST rates on construction materials
The cost of construction is directly dependent on the cost of raw materials and procurement charges. Although the government has reduced GST for affordable and under-construction buildings, materials like cement 28%), steel, doors, windows, electrical and sanitary items (18%) still pose a challenge, due to high tax rates. The Industry requests the government to reduce inputs and input services tax to between 5% and 12%.
Single window and Industry status
The real estate sector has been requesting single-window clearance for speedy project approvals and simplified processes. These processes, which currently take enormous amounts of time, are impacting project delivery. Another long overdue demand is for the provision of industrial status to the sector, which is the second largest contributor to GDP and rural employment.
Affordable housing
Profits from the business of developing affordable housing are exempt if the project is approved before March 31 2019. The interim budget proposed to extend this till March 2020. Real estate sector recommends extending the timeline further to support the government’s vision “Housing for all by 2022”. Also, Maximum Alternative Tax (MAT) is a huge burden for the developers developing affordable housing. The removal or reduction in this will boost the affordable housing development.
Govt must divest from enterprises, give pvt players chance to jump in
Harish Bijoor,
Brand Guru & Founder, Harish Bijoor Consults Inc.
The Union Budget is a journey, not an event. As this journey begins for the coming year, and in many ways, for the next five under a new Finance Minister and PM Modi, the two agendas are: I am looking to see the Public Sector Enterprises divestment target to be set at a robust number, and more importantly, to see real divestment with active outside funds infused into the economy. We need to see funds showing interest in the government's assets, much of which it must not manage anymore. Air India is a classic case. Money must come not from other government and quasi-government bodies like LIC as a cross-flow. That is incestuous divestment. Instead, interest must flow from genuine investors wanting to make a go of these public sector enterprises. That will give a lease of life for these PSE's as well, in good and solid hands.
Secondly, I am looking at FDI to perk up from the stagnation it got into last financial year. If over the next two years we are able to attract a hundred Billion USD in FDI, this is an exciting non-debt investment into the Indian economy. A robust flow of Foreign Direct Investment is also the ultimate thumbs up signal to say that India has arrived, and has a robust economic future.
Focus on water security, healthcare, higher education
Mahalakshmi Parthasarathy,
#commonwemenspeak
Water security, women security, affordable healthcare and higher studies should be high on agenda in the coming budget. A Master plan should be drawn under smart cities encompassing water security for cities and towns. Unless we provide water security, industries and IT sector cannot flourish. What’s the point, after all, of high-speed wifi in public places when people have no water to drink? Instead of looking at band-aid solutions, the Budget must lay down a road map that is sustainable for major cities and small towns, too.
The cost of healthcare and education has gone through the roof. The former must be made affordable and available to senior citizens. Currently, people are forced to blow up all their savings on quality healthcare and to care for senior citizens. Higher education is also extremely expensive and must be made affordable, if we are to better our human resources. Such resources must be optimally tapped for the benefit of the country.
Railways projects, public transport are priorities
Sanjeev Dyamannavar,
Founding member Praja RAAG
Ongoing Railway projects across Karnataka should be given maximum funds to ensure Doubling, Qudrapling and Electrification works are finished in a time-bound fashion.
The Railway Ministry also needs to allocate funds, to improve terminal capacity and passenger amenities.
The Suburban Rail project needs to start soon, through a Special Purpose Vehicle model, with all the required clearances from both the Karnataka government and the Railway Minister. A minimum of Rs 400 crores each, from Railways and the state, should be allocated in this budget. Other long-neglected projects, like Level-Crossing elimination need to be kickstarted once more, with a big thrust across Karnataka. This will enable capacity addition. The signalling system is in dire need of an upgrade and needs a substantial allocation of funds.
The people have high expectations now, regarding the sanction of a high-speed rail system from Bengaluru to other major cities, as well as a freight corridor.
Another project crying out for funds is the upgrading of the Bengaluru-Pune highway into six lanes. That too should get clearance in this budget. The city’s bus network and public transport system needs a separate boost and an emphasis on non-pedestrian facilities will help improve public transport.
The Namma Metro project has had funding issues as well, which need to be reworked to ensure projects are completed.
Make pricing realistic for govt health services
Dr Deepak Balani,
Chief of Medical Services, Sakra World Hospital
India being a third world country needs to focus more on primary healthcare. I would also suggest we devote greater attention to safe water supply, sanitation, nutrition, vaccination, care of mothers-newborns- infants and public health. Health being a state subject means the state governments have a big role to play.
The Centre’s role involves development of modern healthcare in underserved areas without diluting quality, as well as upping standards of medical education.
The pricing of government health schemes is very non-remunerative and does not support quality secondary or tertiary care. Pricing should be more realistic for such schemes to really take off. Moves towards widespread price control and overbearing legislation and regulation of healthcare services may be counterproductive in the long run.
As Union Finance Minister Nirmala Sitharaman prepares to present her maiden budget on July 5, the Indian economy prepares for a fresh start with its new Finance Minister and for a second term under Prime Minister Narendra Modi. Access to basic amenities like affordable housing, quality healthcare and even higher education top the public’s list of demands. The real estate sector, which has been on a rollercoaster ride these last five years, with demonetisation and GST rocking the pitch, expects single-window clearances, industry status and more sops after the bumpy terrain it has endured so far. Allocation of funds for railways in Karnataka, high-speed trains and for the development of suburban rail is a must. Experts talk to Deccan Chronicle about where the government’s priorities should be for the next fiscal year.
