Allied Industries Wait For Budget With High Hopes

The year 2017 was significant with the launch of Goods and Services tax (GST) which proved to be beneficial for the various industries which are tied to the real estate sector in an integral way. Several building materials including plywood, plastic and flooring items became cheaper. While there are signs of real estate sector being granted an industry status, leaders of many allied industries are also brimming with new hopes as the announcement of the Union Budget 2018 is strikingly close.

PropGuide brings some insights on what allied industries are expecting from Budget 2018:

Road and infrastructure

Road development will get a massive push forward as the government is planning to fund road and highways projects such as Rs 6.92 lakh crore Bharatmala. It will be done through market borrowings, central road funds, monetising government owned road assets, insurance and pension funds. The centre may also offer tax benefits and compensation in case of delay in payments to incentivize the private sector under the PPP model. Besides, increased allocation of funds from the government towards construction of infrastructure and irrigation is expected.

Some changes are likely on the tax front that will benefit the industry. The Minimum Alternate Tax might undergo some modifications along with Sec 80IA that concerns upgradation of existing infrastructure and Sec10 (23G) that provides exemption to investors of these projects.

Cement

The Indian cement industry, which is one of the largest in the world is looking for some reduction in GST rate as it is presently in the highest slab at 28 per cent. This will bolster the demand for this building material and curtail its costs for the sector which directly depend on it. Industry analysts predict a high growth rate for this industry in the coming year, FY 2018-19.

Power

With creation of smart cities, power demand is at an all-time high. As the country aims to attain 175GW of renewable energy capacity by 2022, the renewable energy industry seeks for some relief in the form of exemptions on taxes and duties – that is lowering of corporate taxes, and extra allocation of funds. Plus, it looks for some better schemes that will improve investment opportunities in this sector. Lack of suitable power transmission calls for some stronger economic policies and regulatory actions. Timely payment from discoms is another area where the industry wants the government to focus.