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Infra sector could see 25% rise in allocations for capex
The budget is expected to be implementation-heavy for the infrastructure sector as the government made several key announcements last year that are under implementation, said industry experts
The budget is expected to be implementation-heavy for the infrastructure sector as the government made several key announcements last year that are under implementation, said industry experts.
“We expect the Union budget to take a strong position on aggressive implementation of Gati shakti (National Master Plan for Multi-modal Connectivity), national single window system for clearances, surety bond as substitute for bank guarantees,” said Vinayak Chatterjee, chairman, CII’s national council on infrastructure. He was speaking at Mint Budget Conversations on infrastructure recently.
“Issue of delay in implementation remains, though it is being taken seriously by the government,” Chatterjee said, and added that he expects a 25% increase in allocation towards capital expenditure for infrastructure to about ₹7 trillion in the budget.
This year’s budget saw a sharp increase in outlay for capital expenditure to ₹5.54 trillion, from ₹4.39 trillion in the previous fiscal.
During this period, the National Infrastructure Pipeline expanded to 7,400 projects, while 217 projects worth over ₹1 trillion were completed.
“Among the questions to ask are what to do, how to do it, and how to finance it. However, over the last 18 months, a lot of these have been answered in the form of four Ns—NIP (National Infrastructure Pipeline), National monetization pipeline, National Program and Project Management Policy Framework (NPMPF), and national bank for financing infrastructure and development,” said Shailesh Pathak, co-chair, Ficci infrastructure committee.
Pathak said governments, especially at the state level, should come on board for initiatives such as Gati shakti mission.
Niranjan Hiranandani, co-founder and MD, Hiranandani Group of Companies, in turn, said he hopes to see affordable housing extended to cities such as Mumbai, and Delhi, where a large number of people still live in slums.
“Input costs, labour costs have shot up, especially in the affordable housing segment, where margins are very thin. Now with improved sales in 2021, there is expected to be price hikes across the board, including the affordable segment. So, a couple of (policy) changes need to be done to maintain affordable housing,” Hiranandani said.
He added that the government could consider giving relief to sectors such as travel, tourism, hospitality, and media which have been impacted by the pandemic.
India, which is aiming to be a $5 trillion economy, needs to give real estate the status of infrastructure, said Khair Ull Nissa, executive director, World Trade Center, India Services. She said the government’s focus is on affordable housing, though it should be on the entire real estate sector as it is one of the largest employers in the economy.
“Rera (Real Estate Regulatory Authority) has been a very good initiative by the government, but only a few states have implemented this. All states need to implement Rera,” she said. “Access to finance has been one of the major hindrances for growth among real estate developers.”
The government should also look to provide easy funding to home buyers, said Rajan Bandelkar, President, National Real Estate Development Council, and added that for consumers taking their first home loan, the entire interest amount should be deducted as income tax.
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First Published:25 Jan 2022, 01:34 AM IST
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