Budget Reaction

    Shishir Baijal, CMD, Knight Frank India

    Shishir Baijal, CMD, Knight Frank India
    "The Union Budget 2018-2019 has predominantly focussed on revitalising the rural economy, which is a good move. We also welcome the thrust on healthcare, agriculture and infrastructure sectors. Throughout last year, measures surrounding Affordable Housing were the mainstay from the perspective of real estate industry. This was also evident in the Credit Linked Subsidy Scheme (CLSS) and the last GST Council meet where they brought down the effective rate to 8% from 12%. A similar trend is visible in this budget where the Affordable Housing fund under National Housing Bank (NHB) has been created as a part of the priority sector lending. However, there is silence in the budget on stimulating mainstream real estate demand. The sector, grappling with the reforms-driven new order, has been bereft of any meaningful interventions that could have been achieved through the budget."

    Manish Agarwal, Partner and Leader- Infrastructure, PwC India

    Manish Agarwal, Partner and Leader- Infrastructure, PwC India
    "Rs. 50 lakh crore for infrastructure is welcome as it reaffirms continued funding of various initiatives in Roads, Railways and Urban Infrastructure. Quantum leap in airport capacity is key requirement to keep pace with the rapid growth in aviation. Other initiatives, outside the budget, to revive private sector play in these sectors, will complement and further the impact of the budget allocations."
     
    Vipin Sondhi, MD & CEO, JCB India

    Vipin Sondhi, MD & CEO, JCB India
    "The Union Budget is a balanced one with a focus on the Agri Sector, Rural Development, Healthcare, and continued thrust on Infrastructure creation. All of these will provide significant impetus to revival of growth and creation of employment. The Budget also addresses opportunities to modernize and create new infrastructure in Affordable Housing, Railways, and Airports, which continues the effort of the last few years. These will present favorable opportunities for growth in the Indian Construction Equipment Industry. Incentivisation to the MSME sector, which forms the backbone of industrialization of a nation, as also job creation, is another welcome step."

    Amit Gossain, MD, Kone India

    Amit Gossain, MD, Kone India
    For the elevator and escalator industry, the budget is promising, considering the various initiatives by the government. These include its move to promote affordable housing by setting up a special fund which is a welcome step. It will boost buyer sentiment and help revive the real estate market. The boost could come from RERA also, which needs to be present in all states to become more effective. In line with the government's Housing for All by 2022, over one crore houses were being built or would be built in rural areas in the current and next financial year under the Pradhan Mantri Awas Yojana. In urban areas, assistance has been sanctioned to construct 37 lakh houses. These initiatives will also give a good boost to us.

    The other positive is the announcement of upgrading 600 major railway stations, and all railways stations with more than 25,000 footfalls to have escalators to enable 'ease of living'. We are well equipped to provide heavy-duty, technologically strong and long-lasting escalators for high traffic areas as seen in metro stations, but the government has to announce the specifications. The budget has also set the right course for the Aviation Sector's growth by announcing substantial increase in airport capacity.

    Mr. Sandeep Singh, M.D, Tata Hitachi

    Sandeep Singh, M.D, Tata Hitachi
    Clearly, in the run up to the elections, the budget is aimed at a major political constituency- farmers & rural populace! However, fixing of MSP to 1.5 times the cost of produce, preponing target for completion of PMGSY to Mar19 with start of PMGSY 3, increased funding for irrigation - all involve direct & indirect investment in rural infrastructure. Continued focus on transport infrastructure including roads, railways, logistics parks and adequate funding is a very positive step. There is huge investment announcement for suburban rail corridors in Mumbai & Bangalore of Rs. 57000 cr. The focus on investment in Smart Cities continues with the pipeline of projects expanding to Rs. 2.04 lakh cr.

    Targeted disinvestment in 2017-18 is expected to be significantly exceeded - boosting revenue. On the flip side, relaxation of fiscal deficit both for 2017-18 (3.2% to 3.5%) and 2018-19 (3.0% to 3.3%) could impact the rupee and add to inflation. This, along with the increase in customs duties for certain components and aggregates of automotive industry, and 10% social welfare surcharge, will drive up cost of manufacturing.

    Vinod Aggarwal, MD & CEO, VECV

    Vinod Aggarwal, MD & CEO, VECV
    Union Budget 2018-19 is pro-development and committed to the welfare of the rural economy. There is much emphasis on boosting income for rural populace and improving farming which is good news for the industry. The agri market and infrastructure allocation of Rs. 2000 cr will translate into demand for farming equipment and light commercial vehicles. Increase in rural credit will also have a positive implication on the much-needed finance penetration here.

    From the CV industry perspective, we are extremely happy to see the government's continued focus on infrastructure. With 21% more expenditure towards infrastructure and allocation of Rs. 5.97 lakh cr, the government is ensuring India continues to charge ahead and remain one of the fastest growing economies in the world. The FM also confirmed exceeding the highway construction target of 9000 km by end of FY18. India is continuously evolving on the back of improving road connectivity and pace of urban development and Smart Cities.

    Sorab Agarwal, Executive Director, ACE

    Sorab Agarwal, Executive Director, ACE
    "The Union Budget 2018 with an agenda to develop, educate and sanitize rural India, is reasonably balanced for inclusive growth of the Indian economy. The government has taken the onus of constructing 35,000-km of roads under the Bharatmala Pariyojana project, for which it has allocated Rs 5.35 lakh cr for seamless connectivity in backward and border areas. The allocation of Rs 11,000 crore for Mumbai rail network will create a positive impact on the infrastructure sector, and the announcement of constructing 9,000 km national highways will create job opportunities.

    Budget is also strengthening the railway network and enhancing railways' carrying capacity. The capex for Railways pegged at Rs 1,48,528 crore for FY2018-19, will not only boost the transport system but also create a huge opportunity for ancillary industries. UDAAN initiative is also set to escalate the Airways sector and provide opportunities for companies in the infrastructure space.

    Affordable housing schemes and government's investment of 2.04 lakh crore for building 100 Smart Cities will further enhance development in the Infra sector. Overall, this is a growth budget with high emphasis on infrastructure, health, education and agriculture sectors."

    Yadupati Singhania, CMD, JK Cement Ltd

    Yadupati Singhania, CMD, JK Cement Ltd
    "On the infrastructure front, the Finance Minister has shown remarkable restraint, and therein lies the brilliance of his announcements. India is at the cusp of an infrastructure revolution, and the budgetary support of Rs. 5.97 lakh crore for FY19 will be a big positive for the sector and supplementary industries such as cement.

    The focus of the government will likely remain on effective and timely execution of existing projects, with the FM promising construction of 9,000 km highways by the end of FY19. Also, it was encouraging to see the reinforcement of the government's commitment to the Bharatmala Project, which will boost demand in the next financial year. Announcement of the Affordable Housing Fund will create an impetus for the housing sector, which contributes around 65% to India's cement demand."

    Peeyush Naidu, Partner, Deloitte India

    Peeyush Naidu, Partner, Deloitte India
    "The budget sets the right course for the Aviation Sector. It reaffirmed commitment to sustaining the growth in the sector by focusing on substantial increase in airport capacity! UDAAN - a scheme where Deloitte has closely worked with and supported the Ministry, is expanding the aviation network through a transparent market-based model, as a result of which, hitherto unserved airports and helipads will be connected by existing and new operators.

    The budget has maintained focus on required capital expenditure for Indian Railways for the year 2018-19 for modernization and safety-related initiatives as well as capacity expansion. The key imperatives, going forward, would be for the Ministry to focus on leveraging technology and private sector involvement in effectively and efficiently meeting mobility solution expectations of its different clients (freight, different passenger segments, etc)."

    Jayant Mhaiskar, VC & MD, MEP Infrastructure Developers

    Jayant Mhaiskar, VC & MD, MEP Infrastructure Developers
    Union Budget 2018 has struck a fine balance between fiscal prudence and providing growth boosters to the economy. It is a progressive budget and in line with the development priorities of the government. The Finance Minister has made a strong attempt to pump the rural economy, agriculture and infrastructure sectors.

    The government continues to boost the infrastructure sector, (which is the backbone of the country's overall development), with a proposed Rs 5.97 lakh crore additional budgetary allocation. The Bharatmala Pariyojana has been approved for providing seamless connectivity of interior and backward areas and borders of the country to develop about 35000 kms in Phase-I at an estimated cost of Rs.5,35,000 crore. To raise equity from the market for its mature road assets, NHAI will consider organizing its road assets into Special Purpose Vehicles and use innovative monetizing structures like Toll, Operate and Transfer (TOT) and Infrastructure Investment Funds (InvITs). Overall, a populist budget, which adheres to the fiscal discipline, with emphasis on growth and development of the economy.

    R Shobha, National Director, Project Management, Colliers International India

    R Shobha, National Director, Project Management, Colliers International India
    MSME sector will benefit from the capital support announced, but the real impact on the overall industrial sector will be seen once the policies around land acquisition, infrastructure, company registration etc. make it easier for small companies to set up."
     
    Dr. Niranjan Hiranandani, CMD, Hiranandani Communities

    Dr. Niranjan Hiranandani, CMD, Hiranandani Communities
    Finance Minister has managed to balance populist demands, the need to support economic growth and Prime Minister's focus on fiscal discipline and reforms. From a real estate perspective, the FM announced that the government will establish a dedicated affordable housing fund in the National Housing Bank through various funding measures. This is a welcome step. The mention of reducing hardships faced in realty deals is 'positive'. Suburban Railways in Mumbai find a mention in the budget, with Rs 11,000 crore of outlay. Improved railway network and accessibility generally have a positive multiplier effect on real estate. Targets of Swacch Bharat, rural electricity and LPG connections have been increased substantially.

    Ashwin Sheth, CMD, Sheth Group

    Ashwin Sheth, CMD, Sheth Group
    "The Union Budget 2018-19 has struck the right chord in line with its affordable housing vision which will promote a robust development of the Real Estate Sector. We applaud the FM's decision to establish a dedicated affordable housing fund in the national housing bank to make this vision a reality.

    The government has taken a step in the right direction by focusing on infrastructure development with respect to road and rail connectivity as this will catalyze growth of the housing sector. Initiatives to boost the Mumbai suburban railway network will significantly boost the residential and commercial market in the city. Moreover, focus on the smart cities project will help in improving the standard of living.

    However, clarity on single window clearance and GST was much anticipated. We also expected incentives for first-time home buyers, which would have helped increase demand and create equilibrium in the demand-supply gap. Most importantly, granting industry status to the real estate sector, which is one of the largest contributors to the growth of the economy, was the need of the hour. While this budget focuses on the overall growth of the economy, we will adopt a wait and watch approach and hope adequate measures are taken to boost the real estate sector."

    Khushru Jijina, MD, Piramal Housing Finance

    Khushru Jijina, MD, Piramal Housing Finance
    The Union budget 2018 is a pragmatic one and is focused on fortifying the economy as a whole. The government's endeavor to provide housing to every poor citizen by 2020 through the establishment of a dedicated affordable housing fund in the national housing bank, along with priority sector status being granted, is a commendable one. The government assuming ownership of NHB from RBI is also positive as it would translate into the focus of NHB shifting from regulation to development.
     
    Shekhar Singal, MD, Eastman Auto & Power

    Shekhar Singal, MD, Eastman Auto & Power
    It is a people focus budget. When our honourable finance minister announced the series of measures in Budget 2018-19 to promote clean energy, access to power and energy security, we as a company are looking forward to its future scope.

    EAPL would be supporting Mr. Arun Jaitley's initiative of full electrification on providing electricity connection to nearly 4 crore poor households under Sobhagya Yojana. Also, with the announcement of promoting electric vehicles. The Centre may lower GST and pass benefits to buyers, which will give a major impetus to the shift to clean energy.

    However, in the renewable energy sector, there are a number of policy decisions related to import duties and domestic manufacturing, which needed to be addressed to further boost the sector. Also, achieving the target of 175 GW of renewable energy capacity and generating it by 2022 requires a lot more to be done than simply increasing the budgetary allocation.

    Faizal E Kottikollon, Chairman, KEF Holdings

    Faizal E Kottikollon, Chairman, KEF Holdings
    "It is heartening to see the Indian Government adopt sturdier measures to benefit all sections of the population - especially small and medium-sized businesses, farmers, and much of the country's population in need of better health, housing, education and general infrastructure provisions. The National Health Protection Scheme that is set to cover over 50 crore people is also a good initiative. With our growing business presence in India, I am especially pleased to see the reduction in corporate tax to 25 per cent. This is a significant move, and one that enables robust growth through private sector investment, which has been sluggish. Together with the impact of GST and greater opportunities for FDI, we will see India Inc. really shine in 2018."

    Samyak Jain, Director, Siddha Group

    Samyak Jain, Director, Siddha Group
    "Union Budget 2018-19 can now be termed as a Pro-India budget that will ensure an all-round growth of the economy and boost the nation's GDP. Infrastructure development, a key factor in the growth of real estate, has been given significant importance. Improvement in road and rail connectivity will be instrumental in changing the face of the industry. Initiatives to boost affordable housing sector will lead to the fruition of the government's 'Housing for all by 2022' vision. Additionally, we appreciate the government's efforts to advance their smart cities project which aims to improve the quality of life.

    We applaud the positive outlook towards employment in rural development and healthcare services. We anticipated some announcements on income tax relief, single window clearance, granting industry status to real estate and clarity on GST with respect to subsuming stamp duty and registration charges, but we hope the government takes measures to address this in the near future. The proposed budgeted expenses in various sectors such as Rural Infrastructure, Health and Fishing will have a positive impact on the economy and we look forward to a productive year."

    Ambresh Tipnis, Director, Shivalik Ventures

    Ambresh Tipnis, Director, Shivalik Ventures
    "Overall, the budget is growth oriented for real estate sector. The government move to set up a special fund for affordable housing will boost development of affordable homes. We expected the government to come up with other measures such as single-window clearance and according industry status to the sector. However, the budget will enhance the Prime Minister's initiative of 'housing for all by 2022'. It will boost the real estate market as we can expect increase in bookings."
     
    Sumit Joshi, VC & MD, Philips Lighting India

    Sumit Joshi, VC & MD, Philips Lighting India
    "We welcome the Union Budget's strong focus on inclusive development, with allocations for enhancing both rural and urban infrastructure. It gives a big boost to rural infrastructure by ensuring electricity access to all rural households under the Saubhagya scheme. Additionally, the allocation of Rs 2.04 lakh cr for developing smart cities will go a long way in creating world class urban infrastructure."
     
    Amit Modi, Director, ABA Corp and VP, CREDAI Western UP

    Amit Modi, Director, ABA Corp and VP, CREDAI Western UP
    "We appreciate the government's impetus on the development of overall infrastructure as it will also boost the real estate sector. We had expected the limit of tax deduction for housing loans to be increased up to Rs 5 lakh from the current Rs 2 lakh per annum which would have brought the much-needed fillip to the infrastructure sector. Setting up a dedicated fund for affordable housing will help create more affordable supply generating demand from end-users. The long-term capital gain tax on equity will also create a level playing field for the long-term capital parking in the real estate sector. Announcement of a new Flagship National Health Protection Scheme providing health insurance cover of ₹5 lakh per family per year will increase productivity of the workforce in infrastructure and real estate sectors."

    Kishore Bhatija, MD, Real Estate Development - K Raheja Corp

    Kishore Bhatija, MD, Real Estate Development - K Raheja Corp
    Year 2018 sees a populist budget presentation by our FM catering to the needs of the common man and the economy. The budget has provided financial allocations in maintaining the government's larger vision of 'Building the Nation' and 'Housing for All'. The budget's capital expenditure focussing on key sectors such as agriculture, infrastructure and housing, amalgamate to provide necessary momentum and thrust to the economy. Changes in corporate taxation will incentivise many to invest and be competitive. Overall, the budget creates an environment for inclusive growth, and infuses transparency into the system.

    The Real Estate industry was seeking some very important amendments like the industry status, streamlining of taxation norms for REITs, rationalisation of GST, and extension of tax SOPs for SEZ units, which we hope will be addressed soon. Having said that, the progressive nature of the budget has paved way for economic growth, and we look forward to a good year.

    Venkatesh Gopalkrishnan, CEO, Shapoorji Pallonji Real Estate

    Venkatesh Gopalkrishnan, CEO, Shapoorji Pallonji Real Estate
    "The government's move to promote affordable housing by setting up a special fund will boost buyer sentiment and help revive the real estate market. We expected the government to give industry status to the real estate sector, though its efforts to support infra development is laudable, and it will have some impact on the real estate market."
     
    Hemant Kanoria, CMD, Srei Infrastructure Finance Limited

    Hemant Kanoria, CMD, Srei Infrastructure Finance Limited
    This year's budget has primarily focused on three key sectors: agriculture, healthcare and infrastructure. The proposed plan of the government to provide 10 crore poor and under-privileged people with a medical treatment coverage of up to Rs 5 lakh is indeed a laudable step as healthcare has always been a problem for most of the population.

    A wide array of steps has been announced ranging from enhanced MSP for Kharif crops, upgradation of Rural Haat-s to enable small and marginal farmers to sell directly to bulk purchasers and consumers, expansion of rural infrastructure, enhanced outlay for irrigation and adoption of cluster model for horticulture, all of which augur well for the rural sector. Allocation of funds for fishery, aquaculture, animal husbandry, dairy farming, agro-logistics services, extension of crop loans to lessee cultivators and schemes like National Bamboo Mission can fuel entrepreneurship at the rural level. I welcome the setting up of an Agri-Market Infrastructure Fund with a corpus of Rs 2,000 crore. The decision to set up 42 Mega Food Parks can give a fillip to the agro-processing industries, however there is not much clarity on how the government intends to build those - on its own or in collaboration with private sector.

    In infrastructure sector, two areas of focus have been on roads and railways. The envisaged investment of Rs 5.35 lakh crore (for Phase I of Bharatmala programme) for roads and capex of Rs 1.46 lakh crore for railways will also result in growth for construction equipment manufacturing companies, construction companies and contractors, and infrastructure financing institutions. It will boost employment generation as construction is the second largest employment generator after agriculture.

    Another laudable step taken by the government is to develop the corporate bond market and the amendments proposed in the stamp duty structure. It is quite important to develop the capital market which has been our request for the last few years in order to bring more depth into the debt capital market. There are certain steps to be taken so that the conceptual thinking of the government can be converted into implementable actions. One of the most important areas to be addressed is to enable, facilitate and encourage Pension Funds, Provident Funds and Insurance Companies to invest in bonds issued by infrastructure companies even if those bonds are investment grade and do not fall in the category preferred by these fund repositories.

    The introduction of the tax on long-term capital gains could have been delayed by another few years, especially keeping in mind that the equity capital market is the only option for many companies for mobilising resources as the banks are presently shy to lend to manufacturing and infrastructure companies. This would surely dampen the buoyant investment spirit which has been prevailing.
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