| Maharashtra Budget
aims to boost the
infrastructure sector |
 Ajit 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.
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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