|
|
Accommodation Times analysis on Union Budget 06-07Dear Friends, With
learned speakers like Anil ji and Mr. Shah who will be giving you in-depth
analysis on the Union Budget. I am eager too to listen to them. I shall put some
point which I think needs to be clarified and want immediate attention of the
real estate industry. In
his budget speech Hon. Finance minister forgot to address plight of millions of
homeless citizen of India. It is a non committal budget. Neither it allocated
anything to the poor housing scenario in the country nor it helped the industry
to go on sustainable growth like we have seen in housing finance sector and real
estate market as a whole. Government
after government failed to recognise the real estate as an industry. Builders
and Developers are struggling hard for fund raising, but by proxy. No fund
created to finance the Vishwakarmas who provide shelters and do the job of
government instead. Only venture funds are available at a very high cost. Few
advantage was given under section 80 IB, but it is now in total confused state.
Anil ji will tell you more about it. Finance
Minister has claimed that 8.7 lakhs rural houses were built and total fund
utilised was Rs.2,260 crore. We require much more then these 8.7 lakh houses in
rural India under Bharat Nirman Scheme. The
Jawaharlal Nehru National Urban Renewal Mission was launched on December 3,
2005. For the next year, against the estimated outlay of Rs.6,250 crore, Mr.
Chidambaram proposed to provide a grant of Rs.4,595 crore. Apart from the four
projects, including Mumbai metro rail and Bangalore metro rail, mentioned in his
Budget speech last year, the projects under active consideration include
projects in Maharashtra, Madhya Pradesh and Gujarat. Urban Mission has
been confused with the transportation and infrastructure development. There
is huge allocation for these but urban poor still kept in dark for probable
housing. Finance
Minister said that “planned urbanization can act as a spur to growth,
employment and a better quality of life. Government will actively promote the
establishment of new towns, preferably focused on a specific industry, for
example Information Technology, or a specific theme, for example education or
health. Some projects are on the anvil in West Bengal and Karnataka”. We say
please upgrade the existing towns first. New towns are needed but not at the
cost of total collapsed infrastructures. Finance
Minster also said that Foreign Direct Investment (FDI) continues to play an
important role. We have the opportunity to make India a manufacturing hub for
textiles, automobiles, steel, metals, petroleum products etc. for the world
market. We
do not have any vision for FDI in real estate. We do not want expertise and
professionalism in real estate? We do not want funds in real estate? Then why
Real Estate was not mentioned in the priority sector. Finance
minister has now only allowed Rural Electrification Corporation and National
Highway Authority of India to issue bonds for tax exemptions for capital gain
taxes. Why National Housing Bank was restricted , is anybody’s guess. NHB is
very much concern with real estate and its long term capital gains. NABARD and
SIDBI is also restricted to issue such type of bonds. Fringe
Benefit Tax is yet another zazia. Yes I will call it a zazia. Why you want to
tax those who gets fringe benefits from the employer. To ease the working
environment or to accommodate them for training or business tours or
contribution to future funds, does the poor employee take any benefit
personally? Then why tax him. It enhances the paper work and nothing else. Every
corner of the country urged including CII that the FBT must be scraped at once
but it remains. Thank god that the minister maintained the status quo
for housing finance benefit, and 80 IB for builders. What we wanted was
more then what it is said. The exemption should have been atleast for Rs.4 lakhs
if not Rs. 5 lakhs on housing finance, there must have been more allocation for
Mumbai as promised in last budget. This year we were expecting a package for
Mumbai but it seems everything was left for Urban Revival Mission and the demand
was generalized. A
Rs.500 crore fund was expected as strongly recommended by the National Urban
Housing Policy 2005. A Tax free rental income from property was expected under
80 L as suggested by the Policy. It seems Minister forgot to read the promises
made by the Policy. Why make such policies when you do not want to walk on your
talk? Finance
Minister said that “castles are in the air” will be constructed if you do
not give them the foundation. And I am sorry to say that this government also
failed to even plan a foundation for the next generation. Murari Chaturvedi
|
