Infrastructure Continued to see a Thrust of Budget
“In the run up to the electoral year, the Finance Minister Arun Jaitley at the outset highlighted that strengthening agriculture, the rural economy, infrastructure, good health, quality of education, employment and the MSME’s was the focus of the Budget 2018. This is seemingly predictable as we gear up for an upcoming election year.
Infrastructure and urban development continued to see a thrust with Rs.50 lakh crores towards infrastructure, Rs.11, 000 crores towards the Mumbai metro, a focus on the warehousing and logistic segments, and the development of commercial land around the railways, to name a few. Further, the continued focus on the development of Smart Cities, digitization, sustainability, the provision of basic utilities shows an ongoing commitment towards urbanization. The budget also highlights the creation of additional architecture and urban planning institutions to fulfill the much needed skill gap in the built environment.
Budget 2018, however, shied away from addressing some of the key concerns of the real estate sector, a departure from the previous years. As one of the main sectors of the economy vying for an industry status and a demand side boost, and one that has powered through the impact of a new regulatory regime and the GST, the budget seems to leave the sector at status quo.
Affordable housing, where the real shortfall exists, saw an encouraging boost with the creation of a dedicated Affordable Housing Fund by the National Housing Bank (NHB) to address the issue of funding constraints faced by all stakeholders. The additional commitment to rural affordable housing is also a welcome addition, as is the recapitalization that allows banks to lend Rs.5 lakh crores.
Will the LTCG levied on equities may be contribute to having investors look at alternative assets in real estate is something that is left to be seen? The initiatives on job creation and healthcare, while seemingly necessary, are aggressive and in need of strong execution plans to see a successful fruition. The incentives provided to senior citizens were a welcome move, as were some of the initiatives in education and a much needed improvement of teachers in the educational framework. While corporate tax at 25% for companies with a turnover of up to Rs.250 crores I am sure has been welcomed positively, the fiscal slippage is something to carefully consider.”