Budget: Leapfrog from infra trampoline
The Union Budget 2014-15 presented by Finance Minister Arun Jaitley has laid an infra tarpaulin & created a mood for growth. An eBiz integrated portal where all ministries would be integrated by December is underway to facilitate business. The allocations are across the spectrum of infrastructure, manufacturing and social sectors. The intent to inject a booster shot for the manufacturing sector has been attained by protectionism against imports. This will lead to enhancement of industrial capacities for large and also for medium & small companies due to the extension of investment allowance benefits for small sized companies. Further with FDI being eased to 49% for manufacturing in defence sector and easing of finance for SME & MSME sectors, the sector will get the much required trigger. Nearly $ 8 billion have been allocated to kick off the road sector and another $ 8 billion for the urban infrastructure sector. Another 15000 km of gas pipelines, housing for all by 2022, water & irrigation, education, rural infra are part of the whole infra push but emphasis on use of technology is a common denominator. Smart cities have been allocated Rs 7060 cr which is but a small step in the gargantuan opportunity ahead. They have also been identified as industrial cities among industrial clusters & corridors. Masterplanning & urban renewal have been brought centre stage which will make our forthcoming “SM@RT CITIES SUMMIT” being organised on Aug 22-23 at Four Seasons, Mumbai most relevant and vital. Low cost housing will get an impetus with restrictions being lifted for FDI on size and investment amount if 30% of the project is reserved for low cost housing. Since slum redevelopment is now considered part of CSR it can potentially attract large funds. Introduction of REITs for real estate and Investment Trusts for infrastructure will win FDI as the ‘pass-through’ facility has been provided where the fund does not get taxed on gains and only the individual who gains pays, thereby clarifying a prospective double taxation issue. Further initiatives have been integrated such that for e.g. the thrust of renewable energy particularly solar, has been etched in each initiative which can multiply the impact. Industrial corridors & SEZs are being vitalised too. India’s economy at $2.3 trillion is staged to grow to 5.4% to 5.9% as per the Economic Survey from 4.8%. Just a half percentage point jump in growth, say, from 4.8% to 5.3%, will add, at current GDP levels, $11.5 billion to the economy. The arsenal presented by the FM is all set to go beyond. To conclude, the FM has laid out the vision of the Modi sarkaar for India to leapfrog on trampoline of infra.