It is that time of the year when all eyes - economists, public policy analysts, think tanks, individual tax payers, India Inc, et al - are glued to the TV sets. The Union Budget 2020-21 will be presented tomorrow by the Finance Minister Nirmala Sitharaman. As 2020 sets the tone of the new decade, Budget 2020 is expected to be much more than merely an account of expenditure and receipts. After hectic parleys with industry representatives, trade bodies, economists, and various stakeholders, it will be a day of reckoning, forward looking policy statements that will act as a blueprint for this decade, and of course the statement of accounts.
With the Economic Survey's advance estimates pegging FY'20 GDP growth at 5% and a projected 6-6.5% GDP growth for FY'21, the expectations from tomorrow's budget has literally got bigger. Here's a list of expectation from India Inc, some of which will come true.
Affordable Housing has been a consistent theme of the government and it has taken measures such as tax deduction cap on the interest paid on home loans for first home purchase up to a specified limit, etc. The realty sector wants the horizon to be broadened. "It is good that the government is promoting affordable housing to fulfil the promise of “Housing for All by 2022” under PMAY scheme. But the missing factor is the benefit for the middle-class population. The Government did not address the housing concerns of the mid-segment population apart from strengthening RERA. Therefore, developers are looking at tax and interest benefits for the mid-segment which will help in increasing the sales," said Kishore Jain, president, CREDAI Bengaluru. “The growth of the real estate sector is marred by the procedural delays which escalate the project cost. To facilitate faster clearance, the government should announce a single-window clearance system that will cut the approval period drastically and will expedite the development process," remarked Ashish Bhutani, CEO, Bhutani Infra.
Sanjay Dutt, MD & CEO, Tata Realty is hopeful that the budget can trigger GDP back towards 8%, revive consumption, sentiments, increase job security, add new jobs, revive investments, investor confidence and restore political leadership confidence. "The central government can start with granting industry status to the real estate sector. States can give single-window clearance mechanism for faster completion of projects," he averred. To bring back growth in the real estate sector, being one of the major contributors to country’s GDP and a major job creator, Madhusudhan G., CMD, Sumadhura Group, wants the government to take more developer and investor-friendly initiatives for the betterment of the real estate market, predominantly for the mid-segment housing. The banks must be prodded to ease lending to real estate projects, perhaps through a relaxation of risk weightage norms, albeit temporarily, believes Kamal Khetan, CMD, Sunteck Realty Limited.
"To boost exports of Indian tiles, it is imperative that the incentive on export of tiles should be reviewed and increased so that Indian exporters remain competitive in the global market and the adverse effect of the anti-dumping duty imposed by the Gulf countries be minimised," Kamlesh Patel, CMD, Asian Granito India Ltd. Sidhant Lamba, Founder, Fabrento, an online furniture rental start up, is of the opinion that income tax holiday for start up should apply for all start up companies registered beginning April 2015. According to Ashish R Puravankara, MD, Puravankara Limited, GST rates on materials should be lowered to 5% from the existing 18% and that input tax credit should be provided on building materials used for affordable and mid-segment homes. At a time when the concepts of co-working and co-living are gaining ground, Neetish Sarda, founder Smartworks, wants that Union Budget should provide co-working players with a single window approval approach and give tax benefits to the emerging co-working sector.
With both direct tax collection as well as GST collection falling short of the government's expectations, it remains to be seen what the budget has in store for wealth creation as is the theme for this years' Economic Survey. The policy decisions will set the tone for the new decade as the government is geared up to live up to its promise of a $5 trillion economy by FY'25.