Budget expectations for various sectors
CII said the revival in the investment growth has to essentially come from the private sector and the Union Budget can do a lot in this direction.
PVR Murthy, Group Finance Director at the Yash Birla Group suggests what the Budget 2012 should do for various sectors in order to boost them.
1) Government has no option but to raise both excise and service taxes this year.
2) There are issues with respect to withholding taxes that need to be taken care of.
3) Education – Learning is the way to Growth. Growth and education cannot be decoupled from each other. Education leads to higher employment and paves way for inclusive growth across the country. Over the last couple of years, education as a sector has seen various reform measures both at primary and higher education levels. The adoption of public-private partnership (PPP) model in the education sector could go a long way in establishing success and creating a sustainable momentum in long-term. While the government’s role could be that of funding the projects, it is the execution ability of the private sector which needs to be banked upon for the ultimate delivery of the model.
4) Infrastructure - Without any dichotomy – the future growth prospects of the Indian economy lingers primarily on the infrastructure investment and timely execution of the projects. Thus, one such initiative would be to develop a huge amount of long-term corpus towards infrastructure development through dedicated debt funds (the most recent example being tax-saving infra bonds).According to RICS India, in order for India to achieve its envisaged 10 per cent growth during the coming financial year, the requirement for sustainable infrastructure development is crucial to provide impetus to the economic activities and achieve optimum resource utilization. To overcome slow growth, the government should take steps to up its allocation for the infrastructure sector from the 2011-12 budgetary allocation of Rs 2,14,000 crore. The sector, which saw a muted growth in 2011, hurt by the double whammy of slow policy-making and low private sector investment, hopes growth will be there in the year 2012.
5) Wellness: Health Tourism - To encourage the growth of medical tourism, the government should provide a variety of incentives, including lower import duties and higher depreciation rates on medical equipment, as well as expedited visas for overseas patients seeking medical care in India.“Budget 2012 needs to promote Health & Wellness sector by rendering service tax on all fitness & Spa services. Ayurvedic treatments need to be included in medical insurance claim”
6) Real estate sector - Relax FDI upto 51 per cent into multi-brand retailing. Indian retail will benefit greatly from increased spending in back-end logistics infrastructure and growth of organized retail
7) Infrastructure - Increase infrastructure spending in urban areas with a view to unlock the value of neglected and hidden land assets in suburban and peripheral districts’. Increase outlay to Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Grant industry status to real estate, since the sector is a major driver for economic growth and generates countless jobs across its various verticals and associated industries. Relax norms for repatriation of FDI in real estate. The market environment needs to be rendered more investment-friendly. Enact legislation on REITs to provide exit opportunities to real estate investors. Bring out strong and convincing evidence of intention to implement the proposed real estate regulator in 2012, and provide single-window clearance for real estate development projects.