impact of union budget on infrastructure

UNION BUDGET-2017:INFRASTRUCTURE

INTRODUCTION:• Finance Minister Arun Jatiley presented the Union Budget 2017-2018 in Lok Sabha on Feb 1st, 2017. This is the fourth budget by the Narendra Modi government. • It can be said that most of the government plans for this fiscal year focused towards digitization fighting the issue taxation and also helping the rural population.•Union finance minister Arun jetiley on Wednesday allocated a record Rs 3,96,135 crore to the infrastructure sector.

CONTENT:•PROPOSALS: RAILWAYS-2016•PROPOSALS: RAILWAYS-2017•PROPOSALS: ROAD TRANSPORT-2016•PROPOSALS: ROAD TRANSPORT-2017•PROPOSALS: AIRWAYS-2016•PROPOSALS: AIRWAYS-2017•PROPOSALS: REAL ESTATE-2016

CONT……•PROPOSALS: REAL ESTATE-2017•PROPOSALS: RURAL & URBAN DEVELOPMENT-2016•PROPOSALS: RURAL & URBAN DEVELOPMENT-2017•PROPOSALS:POWER NEW & RENEWABLE ENERGY-2016•PROPOSALS:POWER NEW & RENEWABLE ENERGY-2017• IMPACT:• Conclusion

PROPOSALS: RAILWAYS-2016•Total allocation for roads and railways is Rs.1,21,000 crores.

PROPOSALS: RAILWAYS-2017•Total allocation for railways is Rs.1,31,000 crore.•Total capital and developmental expenditure Rs.1.31lakh crore for railways in 2017-18. including Rs.55,000 crore to be provided by govt.• A new metro rail policy will be announced soon

PROPOSALS: ROAD TRANSPORT-2016•Total investment in the road sector, including PMGSY allocation, would be 97,000 crore during 2016-17.•Allocation of ` 55,000 crore in the Budget for Roads.•Additional 15,000 crore to be raised by NHAI through bonds.

PROPOSALS: ROAD TRANSPORT-2017• INR 64,000 crore allocated for highways.•Rs. 27,000 crore to be spent on roadways.• Jaitely said 2000 km constant connectivity roads have been identified.•He said that 133 km roads per day were constructed under PMGSY against 73km in 2011-14.

PROPOSALS: AIRWAYS-2016• Allocated Rs.1,713 crore to airlines

against a demand of Rs.3,911 crore.• Jaitely has announced a 2% hike in

service tax, making first and business class travel more expensive.

PROPOSALS: AIRWAYS-2017• Government-owned airline has been allocated

Rs.1,800 crore.• Air India had asked for Rs.2,844 crore as equity

from the Govt. for the fiscal year starting April 2017.• As part of this planned equity infusion, the carrier

has so far received 24,000 crore from the Govt.• The carrier posted an operational profit of Rs.105

crore.• However, in the ongoing financial year, the

airline has reported combined losses over Rs.700 crore for april and September quarters.

PROPOSALS: REAL ESTATE-2016• Deduction from tax on profits fro a

hosing project for flats up to 30 square metres in 4 metros and 60 square metres in other cities.

• Deduction for the additional interest of Rs.50,000 p.a. for loans up to Rs.35 lakh.

• Exemption from service tax on construction of affordable houses up to 60 square metres.

PROPOSALS: REAL ESTATE-2017

• 10 million homes to be built by 2019 for the homeless and those living in kutcha houses.

• Holding period for immovable assets reduced from 3 years to 2 years.

• NHB will refinance individual housing loans of about INR 200 billion.

PROPOSALS: RURAL & URBAN DEVELOPMENT-2016Rs 7,600 crore for developing 100 smart cities

Urban renewal & promoting affordable housing in urban areas.

PROPOSALS: RURAL & URBAN DEVELOPMENT-2017•High speed Internet to be allocated to 1,50,000 gram panchayats.

PROPOSALS:POWER NEW & RENEWABLE ENERGY-2016

Ultra Mega Solar Power Projects in Rajasthan, Gujarat, Tamil Nadu, and Laddakh in J&K.

Scheme for solar power driven agricultural pump sets & water pumping stations for energizing one lakh pumps.

PROPOSALS:POWER NEW & RENEWABLE ENERGY-2017•Crude oil strategic reserves to be set up in Odisha and Rajasthan.• INR 1,26,000 crore received as energy production based investments.•Trade infra export scheme to be launched 2017-18.

Review• “It has comprehensively addressed all areas of socio-economic priority: farmers, poor and under-privileged sections of the society, infrastructure development and strengthening of the financial sector. The Finance Minister has rightly prioritized investment in infrastructure and rural economy, with a focus on inclusive growth and capacity building”• - Chanda Kochhar, MD and CEO,

ICICI Bank

“One of the key demand of the real estate sector has been to get industry status to get preferential and lower borrowing rates from banks. This announcement will surely provide ample push for the affordable housing sector in India, a key initiative under housing for all.” -Pro equity CEO and Founder Samir Jasuja.

“Clubbing Union budget and Railway budget and bringing them in February is a drama”. -Mayawati, BSP president.

IMPACT:• Better days ahead for road construction firms

by way of fresh tenders and road projects.• In railways, companies that carry out civil

works and offer track-laying and electrification services will benefit .

• Incentives for affordable housing can set up supply and rational prices and lower finance cost can improve project viability.

• Cement and steel sector should do well if infrastructure does well.

Conclusion•To conclude budget 2017 provides an opportunity to the government to give an impetus to the infrastructure sector, which has been and will continue to be one of the pillars of economic growth and progress.

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