Forty Five days into the formation of the Narendra Modi led Government, the Finance Ministry had an uphill task of presenting a budget that addressed the issues being faced by the Republic of India. While it would not be wise to expect everything that can be done or must be done, the citizens of India had been certainly waiting to hear the newly formed government’s plans to improve the economic situation of the country and to boost investor confidence.
While Mr. Arun Jaitley mentioned that that the last government’s commitment of reducing fiscal deficit to 4.1% is a tough task ahead of him, his budget , according to him is on path to reduce the deficit further to 3.6 per cent in 2015-16 and 3 per cent in 2016-17. Here ‘s a look at one of the key ingredient’s of his growth recipe.
Mr. Arun Jaitley’s maiden budget is a growth oriented budget with emphasis on improvement in infrastructure, manufacturing, quality educations, FDI in Defence to name a few with a greater focus on infrastructure and real estate .
The Finance Minister announced a sum of7,060 crore in the current fiscal towards development of 100 of Smart Cities i.e. satellite towns of larger cities to provide habitation for the neo-middle class. To further boost the development he announced a reduction in the FDI requirement from 50,000 square metres to 20,000 square and from USD 10 million to USD 5 million respectively with a three year post completion lock in.
Further, working towards the NDA government’s vision to provide affordable housing to all, Mr. Jaitley on behalf of the government proposed to allocate 4000 Crore towards development of Low Cost affordable housing. To encourage the younger population to invest in houses, the housing loan rebate on self-occupied property has been increased from Rs 1,50,000 to Rs 2,00,000.
The Finance Minister has further laid emphasis on the long pending Real Estate Investment Trust (REIT). This is a welcome move at a time when developers are facing huge liquidity crunch and high borrowing rate. (REIT) will help individual investors enjoy the benefits of owning an interest in the securitized real estate market. The greatest benefit will be that of fast and easy liquidation of investments in the real estate market unlike the traditional way of disposing of real estate.
Living up to ,if not exceeding, the expectations of the industry, the Finance Minister has