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Monday, 09 Apr 2012
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Maharashtra Budget aims to boost the infrastructure sector


question_ProjectsTodayAjit Pawar, State Finance Minister has predicted that gross state domestic product will rise by 8.5 percent. Is it realistic? Comment.


The rise of just 8.5 per cent in gross state domestic product in 2011-12 bears negative news. This suggests slowdown in the state's economy. Gross domestic product had increased 11.3 per cent in 2010-11.



The budget lacked ideas that may lead to investment cycle and investor confidence in the infrastructure sector. Comment


The infrastructure sector has been fighting the effects of depleting order books, broken cash cycles and high debtleveraging for almost a year and a half. According to the Maharashtra budget, the cost of construction is likely to increase. This is definitely bad news for the sector.


Current liquidity conditions of the market and high borrowing rates are sure to have an impact on investment on infrastructure sector. How far will it affect the sector?


High borrowing rates impede the growth of the sector. People will think twice before investing in the sector due to high borrowing rates. Add to this the poor market sentiment and this will definitely adversely affect the sector.


According to you, which are the positive aspects of the Maharashtra budget?


The Maharashtra budget aims to boost the infrastructure sector. A series of mega projects have been lined up as part of efforts to make India's commercial capital a worldclass city. The projects lined up include 11 new roads, seven flyovers, three creek bridges for Mumbai and three rail overbridges serving the adjacent Thane and Raigad districts. These are surely some of the positive aspects of the budget.


    Lalit Kumar Jain,
National President
CREDAI, Chairman,
MD Kusmar Urban

Chairman & Managing Director, Kumar Urban Development (KUL) and National President, CREDAI, holds a bachelors degree in civil engineering from Dyaneshwar Vidhyapeeth, Pune. He was the President of Promoters and Builders Association of Pune (now known as Confederation of Real Estate Developers' Association of India (CREDAI), Pune) and is a President of the Pune District Amateur Athletics Association. He was the first convenor of national convention of CREDAI at Vigyan Bhawan, Delhi. He is the convenor of Advantage Maharashtra and has been part of founding Federation of Builders and Promoters Association of Maharashtra and CREDAI. Mr. Lalitkumar Jain has been the director of the company since 25 May 2003.


In the Union Budget 2012-13, the Pranab Mukherjee, Finance Minister of India, highlighted the need for affordable housing. So has the time come for developers to gear up and make it a reality?


Definitely. The Finance Minister has at least recognised the need to support affordable housing. However, its not enough. Though, he has accepted many of the proposed measures for promoting affordable housing. Permitting ECB (External Commercial Borrowings) for low cost affordable housing projects is a step in the right direction. Interest subvention of One per cent for loans up to 15 lakh, where the house cost is not more than 25 lakh, has been extended for a year. This increase in tax exemption limit for individuals may give little impetus to affordable housing. The provisions of GAAR and TDS on purchase of property are ridiculous and impractical. The GAAR can bring JV business to stand still and may promote corruption big way.


Views on the recently presented Union Budget 2012-13


The Union Budget 2012-13 is a mixed bag. Its offers some positives as well as some negatives. Affordable housing, permitting External Commercial Borrowings and introduction of Goods and Services Tax (GST) are definitely some of the positives.



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