New Delhi, July 06: As Finance Minister Pranab Mukherjee prepares to present UPA Government’s first Budget after its return to power, there is an expectancy among the industry and the common people alike. Here’s why:
Real estate firms hope for affordable housing boost
Reeling under the credit crunch and slump in demand, realty firms and consultants expect the Budget to provide more incentives for affordable housing sector and encourage buyers by doubling exemption limit on interest paid on housing loans to Rs 3 lakh.
Developers hope that the Budget will pay special attention to the affordable housing sector, besides availability of easy finance to the developers and home-loan borrowers. “We are hopeful that the Budget will have 2-3 things for the realty sector.
On affordable housing, we think more tax incentives or rebates will be given,” the head of Jones Lang LaSalle Meghraj Cairman and Country, the country’s largest real estate consultant, Anuj Puri, said.
Auto companies are looking forward to the continuation of incentives, including excise duty cuts, given in the two stimulus packages in the Budget 2009-10. Major auto players are expecting that the government will continue with 4 per cent CENVAT cut and reduce excise duty further to 8 per cent from 10 per cent, as announced in the two stimulus packages in December and January.
“Availability of finance at reasonable cost is important for the industry, without which sales of vehicles can’t be revived,” Maruti Suzuki India chairman R C Bhargava said. Bajaj Auto chairman Rahul Bajaj said, “Export markets are severely hit due to the global financTax holiday for software firms in for an extension
The government may extend the tax holiday for software exporters beyond March 2010, in the Budget, Analysts said extension of tax benefits will be a great relief to the IT sector, which is reeling under the impact of global financial crisis, which has resulted into fewer number of orders and sharp reduction in earnings. Official sources said though the industry has asked for five years of tax exemption, the Finance Ministry may grant it for two years.
Currently software-exporting firms enjoy a tax holiday as their units are set up under the Software Technology Parks of India scheme, which entitles them to such a benefit. Major software exporting firms earn a major chunk of their revenues from the meltdown-hit western markets.
The FM may announce recapitalisation of public sector banks to help them meet the credit demand of productive sectors, especially those hit hard by the global financial meltdown. He had given an indication to this effect in his address to the heads of public sector banks last month.
“As the main shareholder of the public sector banks, the government has already announced that it wants to recapitalise public sector banks to enable them to achieve the CRAR (Capital to risk-weighted Assets Ratio) of 12 per cent,” he had said.
He had said that the government will ensure that the credit growth of public sector banks does not suffer for want of capital. Banks likely to benefit include Bank of Maharashtra and Dena Bank.
–Agencies