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Budget 2021 reactions from industry experts

Budget 2021 reactions from industry experts

Dr. Niranjan Hiranandani, National President NAREDCO

“It is a get well soon type of Budget, the ‘V’ shaped recovery being powered by the Covid-19 vaccination program.” On real estate aspects, the proposals for the annual budget reinforce the Government’s focus on affordable housing. For the home buyer, the second extension of the deadline till 31 March 2022 for the additional Rs1.5 lakh tax deduction given on loans taken to buy a house in an affordable housing project is welcome, as is the developer whose affordable housing projects also get an extension for tax benefits, for projects completed till March 31, 2022. Similarly, tax exemption for notified affordable housing for migrant workers, and the deduction on payment of interest for affordable housing being extended by a year will give a fillip to this emerging segment. As affordable housing attracts only 1% GST and Rs 1000 stamp duty in the state of Maharashtra will augment the production of affordable housing in the state. The enhanced spending on public infrastructure projects like ports, railways, airports, warehousing, gas pipelines, metro, economic corridors is laudable and welcomed by industry that will give impetus to the employment generation and attract the essential investment to lift up the economic revival.

“The strong focus on digital covering setting up of a Fintech hub at Gift City, seen in sync with moves to enhance digital payments and use of Artificial Intelligence and Machine Learning etc. in governance, will give a fillip to creation of Digital India,” he concluded.

Given the challenged scenario, the proposed annual budget has been largely positive, no major taxation enhancement is something that is welcome. As the Prime Minister pointed out last year saw mini budgets across the pandemic impacted time frame; the unsaid thing for most industries across the economy is that similar steps may happen with more positives in the offing. Continued focus on ‘Minimum Government, Maximum Governance’ will enhance ‘ease of doing business’, this government spending will provide stimulus for GDP growth, and is laudable.”

Mr. Sarbendra Sarkar, Founder & MD, Cygnett Hotels and Resorts

While there is nothing specific on the tourism and hospitality sector in the budget, I feel broader focus on the budget on increasing consumption and infrastructure spend by the government will have a positive impact on the hospitality sector. The government has done the right thing by not introducing any new tax or COVID cess as some had anticipated. We also believe that the amount allocated for COVID vaccination is a positive for our sector as more people get vaccinated it will encourage people to travel.

Dr. Nitesh Kumar MD& CEO Emami Realty

“Being the first budget after COVID Pandemic the budget holds immense value & importance. The government has addressed the need of infrastructure development and given a handsome boost especially in Bengal and Tamilnadu that will be indirectly beneficial for Real estate also.  The Additional deduction of interest payment up to Rs 1,50,000 for first-time buyers of affordable homes (under Section 80EEA), and profit-linked tax exemption (under Section 80IBA) for developers will again be beneficial for under-construction projects and tax incentive for affordable rental housing projects.

We were expecting some more measures to boost the real estate sector of tax reliefs for individuals have not been met. In nutshell we can say it is a balanced budget.”

Mr. Puneet Dalmia, Managing Director, Dalmia Bharat Group

“The FY22 Budget is big on vision and has taken a series of measures to bring back sustained and high growth for the Indian economy. It is evident that the budget plans to give a big boost to both manufacturing and infrastructure with some path breaking steps like creation of Development Financial institution to fund the ambitious National Infrastructure Pipeline, setting up of National Asset Monetisation Pipeline that will free up idle resources including surplus land with PSUs, and monetisation of various assets of railways like dedicated freight corridors, power transmission lines, roads, and oil and gas pipelines for fund mobilisation. The decision to set up three more dedicated freight corridors will ensure faster and smoother delivery of raw materials as well as industrial and farm products, which will help save costs and allow companies to target new markets.”

“Additionally, the budget has emphasized on creating infrastructure for R&D and Skill enhancement in Artificial intelligence, which will play a pivotal role in preparing the workforce for the future. If rolled out well, all these initiatives will act as a game-changer for the Indian economy and allow India to emerge as global hub for both manufacturing and trained workforce in this decade.”

Sandeep Upadhyay – MD – Infrastructure Advisory, Centrum Capital Ltd

‘’The build up to one of the most anticipated Budgets in recent times at the backdrop of tall claim coming from the FM to expect “a budget like never before” has certainly been vindicated at large and more specifically for stakeholders in some of core sectors like Infrastructure.

The intent it seems is clearly to propel growth within our spluttering economy driven by unleashing the Capex cycle and leveraging the multiplier effect of investing into Infrastructure sector. The staggering increase in allocations to Railways, Roads and Urban Infrastructure segments beats the market expectations, however what was most appealing to me is the shift in approach towards raising capital through a national asset monetisation pipeline and proposed divestments in the financial and banking sector including the much anticipated IPO of LIC. This could be the biggest takeaway from the budget speech today and it has the potential to improve much needed visibility towards identifying the sources of funds which was perhaps missing in the past.

Both NHAI and PGCIL are highly rated and very relevant platforms to monetize assets through the InVIT model which could be a trend setter for others to churn their investments. The proposal for setting up of a Development Finance Institution (DFI) with a capital of Rs 20,000 crore is a welcome move however lending target of Rs 5 lakh crore over the next three years sounds ambitious. TDS exemption on dividend payments to InVITs and REITS will certainly entice more sovereign wealth funds to invest into the sector.

With maximum GST Collections reported so far in January 2021, SENSEX hitting all time high a couple of weeks ago and sustained drop in COVID cases along with Government’s promising vaccination drive now acknowledged globally, CY2021 had already started of with a bang and today’s Budget except for the glaring expected Fiscal deficit numbers for FY22 is expected to get a big thumbs up from the market.’’

Geetamber Anand, CMD ATS Infrastructure ltd and Co – chairman, Real Estate Committee, FICCI

Union Budget 2021-2022, is the much needed catalyst for India’s post-covid revival. It’s a budget for the People of India as it focuses on strengthening the Healthcare and Infrastructure, the much required needs of the nation today. Well Developed infrastructure assures good connectivity and paves way for the development of Tier 2 & Tier 3 Cities. As far as the realty sector is concerned, the exemption of Tax Holiday on Affordable housing projects till March 31, 2022 will be a significant step in fulfilling PM’s vision of Housing for All by 2022. Additionally,  the proposal  to make dividend payments to REIT (estate investment trusts) and Invit’s (Infrastructure investment trusts) exempt from TDS, along with exempting of duty on steel and copper scrap for a specified period is  a much required relief for the Housing sector which has been facing headwinds owing to the pandemic.

However, what the sector requires is immediate infusion of liquidity to give a kick-start to the stalled projects and support the 270 allied industries who are dependent on the realty sector for its survival and revival.

Mr. Abhishek Jain, Chief Operating Officer, Satellite Developers Private Limited (SDPL)

“The Union Budget 2021-22 continued the government’s focus on the affordable housing sector. The government’s decision to extend tax holiday for affordable housing projects by another year is a step in the positive direction to boost the sentiments among real estate players in the market and achieve the government’s vision of ‘Housing for All by 2022’ for India. This budget has focussed heavy on infrastructure that will indirectly lift the housing demand especially in the Tier II & Tier III cities. Also, the Government’s continuous efforts to promote affordable housing will help the real estate sector business in a long way going forward.”

Mr. Pradeep Misra, CMD, Rudrabhishek Enterprises Limited

‘’As it was expected and much needed, there is massive emphasis on infrastructure in the union budget. The number of projects under NIP (National Infrastructure Pipeline) has been extended to 7400, which will help in generating immediate employment. Focus on the Affordable Housing section continues with the extension of eligibility to avail benefits for another year.

Plan to set up ‘Development Financial Institution’ with fund infusion of Rs. 20,000 crores for financing infrastructure & development projects will further help in mobilizing the long term capital, especially through debt instruments. This should be vital in pulling out the projects that are stuck or slowed down. The aim to complete 11,000 Km of National Highways; seven Port projects worth Rs 2,000 crore in PPP mode; extending metro in Tier 2 cities and peripheral areas of Tier 1 cities etc. will collectively create a vibrant economic conditions of growth. As mentioned by the Hon’ble Finance Minister, fund infusion in the infrastructure sector will have to be accentuated by multiple measures, including monetization of assets, creating institutional structure as well as raising the union & state governments’ budgetary allocations.  Overall, the budget has set the tone of intense infrastructure development in FY 21-22 and following years.’’

Mr Ashish Deora, CEO and Promoter Aurum Ventures

“The various sops extended to the real estate sector in the 2020-21 budget is a welcome sign given the ongoing pandemic. Adequate measures have been taken keeping affordable housing in mind number of decisions with respect to extension of tax holiday and housing deduction by another year and extra tax exemption for affordable housing loan by another year.  These initiatives will put additional liquidity in the hands of home buyers which would further boost demand.

Also the proposal to make dividend payments to REIT (Real estate investment trusts) and Invit’s (Infrastructure investment trusts) exempt from TDS will give the sector the much needed fillip. Granting Infrastructure status to the entire Real Estate sector which could be beneficial for lenders, developers and home buyers and will enable access to liquidity and speed up project completion is something which we hoping for but no announcement was made in this regard.”

Mr. Murali Malayappan, Chairman and Managing Director, Shriram Properties Ltd.

I would say, ‘this is a well-balanced, progressive, and revolutionary Budget – the best one possible, in a never seen before challenging circumstance. This is a budget focused on growth and welfare and it will act towards the restoration of normalcy to the movement of people and their livelihood activities.

Supplemented by the various stimulus packages announced from time to time by the Government since the outbreak of the pandemic, this budget will surely help to sustain the economic recovery that is achieved now, through the measures like increased investments in healthcare and infrastructure. Rs 2.23 lac crores allocation for Health care and wellbeing, and allocation of Rs 35000 crores for covid vaccine program, are laudable and the right moves at this juncture.

Government is well aware and appreciative that rapid vaccination would create far more value for the GDP than its actual cost. Approval of two vaccines for emergency use, with approval for another two likely to come soon, gives the indication about Government’s seriousness about faster vaccine administration to masses. This is justified and this is as important as spending for national defence.

Similarly, allocation of Rs5.54 lac crores for capital expenditure and Rs1.18 lac crores for Road Development are much needed progressive measures.

Obviously, with the above growth measures, the fiscal deficit will be much higher than the previous years. But the outlay is inevitable and an essential step. Fiscal deficit is set to jump to 9.5 per cent of Gross Domestic Product in 2020-21 as per the revised Estimates. This may be sharply higher than 3.5 per cent of GDP that was projected in the Budget Estimates.  We have to acknowledge the slump in government revenues amid the pandemic, which has led to a sharp rise in deficit and market borrowing. A new roadmap for fiscal consolidation announced in the budget is well-timed.

As to affordable housing, extension of eligibility of erstwhile tax sop on home loan up to FY22 and extension of tax holiday for affordable housing projects by one more year is a breather and booster.

Overall, this is a “Growth” budget!

Mr Rahul Singla, Director,Mapsko Group

Budget 2021-22 has been enacted as a game-changer for policy support in the residential sector.  This budget embraces a tax exemption for rental housing that has been extended for a year aiming to provide affordable housing for the marginal workers. We could see the flourishing aim of the house for all in affordable price has been prioritized that will cheer the benefit for both consumers as well as the developers. Further, affordable rental housing projects will boost demands in the real-estate sector. Providing additional interest deduction for loans amounting to 1.5lakh to purchase affordable housing.

Mr Manpreet Singh Chadha, Chairman, Wave Group-

“The budget 2021 will set the foundation stone for a high growth rate trajectory. With a clear road map for privatization, the budget proposed CAPEX led to a high trajectory growth story. Retaining tax holiday on Affordable housing projects till March 31, 2022, and the proposal to make dividend payments to REIT and InvIT exempt from TDS is a much-needed relief for the real sector. In a difficult time, it’s a very good budget as it has not changed the tax structure, leaving the disposable incomes at the hand of individual unchanged.”

Mr Anil Gupta, Chairman-cum-Managing Director, KEI Industries Ltd

“The prime objective of Budget’21 is to boost and revive the economy that suffered a major setback due to the global pandemic COVID-19 while also increasing the purchasing power of the customers. Allocation of Rs 3.05 lakh crore outlay over 5 years for a more revamped reforms-based power distribution sector scheme will provide assistance to the DISCOMS which further will benefit us in establishing well-defined strategies and plans to generate more demand and ensure smooth power supply. Further, the government’s announcement to boost renewable energy, solar energy corporation to boosting renewable energy development would in turn help us frame the sector very differently and efficiently. Additionally, looking ahead at the zeal to augment the country’s infrastructure with highway, enhancing public transport in urban areas will prove to be beneficial for the overall development of the society and give the much needed boost to manufacturing companies like ours to get back to powering the economy as per pre-covid levels. “

Anshul Singhal, Managing Director, Welspun One Logistics Parks

“Government’s focus on capital expenditure and infrastructure development will be a shot in the arm for the warehousing and logistics sector in the country. The proposed Development Finance Institution will act as a provider, enabler, and catalyst for infrastructure financing. Also, the budget has earmarked a sharp increase in capital expenditure at Rs 5.54 lakh crore in 2022, from Rs 4.39 lakh crore in 2021. A planned boost to road infrastructure across the country and seven port projects will aid in job creation and income generation. Overall, the large-scale infrastructure augmentation coupled with asset monetization program of core infrastructure assets will go a long way in realising the national infrastructure pipeline, thereby benefiting the logistics sector.”

Anil Chaudhry, CEO, Schneider Electric India Pvt Ltd.

With its extensive focus on infrastructure and healthcare, the Budget FY21-22 clearly focuses on reviving the economy. The key pillars such as health and wellbeing, capital and infrastructure, inclusive development, enhancing human capital, innovation and R&D and minimum government and maximum governance rightly identifies the core areas for sustained growth and provides considerable thrust towards an Atmanirbhar Bharat. The emphasis on further expanding the National Infrastructure Pipeline by creating dedicated financial institution, monetizing operating assets, and raising the share of capital expenditure in central and state budgets is commendable.

The proposal to offer more choice to consumers by introducing competition in the power distribution space by kick-starting Rs 3 lakh crore reforms-based result-linked power distribution sector scheme for state power distribution companies is likely to address the long hanging Transmission & Distribution (T&D) issues and give relief to the power producers, thereby ensuring health for the entire value chain. It is also good to see the government government’s focus towards ensuring smart metering, which will help cut the commercial losses in power distribution.

Further, the proposal to double the MSME allocation with Rs 15,700 crore for medium and small enterprises in FY22 will give the necessary push to the sector.

Considering that India is well poised to play an important role in the global supply chain, the PLI scheme in 13 sectors to create manufacturing global champions for an Atmanirbhar Bharat is expected to play a crucial role. This will encourage growth in these sectors, apart from creating ample employment opportunities for the youth. Overall a growth oriented budget to support the Indian economy to bounce back in the post COVID world.

Mr. Anuj Kumar Garg, Vice President-Customer Engagement & Distribution, Viridian RED

“The Union Budget 2021 highlighted the governments’ major thrust on infrastructure and manufacturing besides healthcare being the topmost priority. From the number of steps proposed to support the MSME sector to set up textile parks, the budget stressed strengthening domestic manufacturing. The government’s focus on infrastructural development and dedicated freight corridors would establish seamless connectivity further augmenting the manufacturing setup in the country. With the aim of drawing more investment, the Budget proposed additional tax incentives for the companies relocating foreign funds to the GIFT city which is a laudable decision in the making of GIFT City a global financial hub. Also, the debt financing of InvITs and REITs is an appreciative move as it will enable the real estate and infrastructure sector to attract more investments. From the employment generation to push real estate demand, these initiatives are likely to bring the economic multiplier effect which is a need of the hour.”

Santosh Agarwal, CFO and Executive Director, Alpha Corp

Seeing affordable housing as the fastest growing sector, the government has announced the extension of one year till 31st March 2022 on the additional deduction of Rs 1.5 lakhs on the sanctioned loans. This will increase and provide a much-needed impetus to the housing demand and encourage prospective buyers to avail more benefits and invest in real estate. The emphasis given on urban infrastructural development through the expansion of the metro rail network will help in seamless connectivity in Tier-II cities along with other prevailing announcements like RRTS , freight corridors will give thrust to the realty sector. The long-standing ask for single window clearance and industry status are still to see the light of the day.

Mr. Ajay Piramal, Chairman, Piramal Group

“I would like to commend the Finance Minister for a well-balanced and realistic Union Budget 2021-22 designed to put India’s ongoing business cycle recovery on a much more solid foundation. The Budget’s high focus on public capital expenditure, relaxing fiscal deficit targets and concrete plans to support financial markets through recapitalisation of public sector banks, and an asset reconstruction company for bad loans will provide the necessary impetus to restore economic growth. While the Budget is cognizant of the country’s immediate economic needs, it also lays out a medium term vision of 3-5 years.

Furthermore, the introduction of a Development Finance Institution (DFI) to fund long term projects will complement the high focus on infrastructure. With banks remaining evasive towards long term institutional exposures, the DFI is expected to ensure availability of credit for projects with long gestation periods.”

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