Industry leaders share wishlist for Interim Budget announcements

For those wondering about the implementation of the Interim Budget, here’s a brief overview of the process:

– During the Interim Budget, Parliament approves the government’s vote-on-account, enabling it to cover its expenses until the new Parliament reviews and passes a full Budget for the remaining year

– In the event of government changes due to General Elections (rather than a trust vote situation), the vote-on-account is granted for a four-month period

– Constitutionally, the Interim Budget allows the government to make tax changes. However, tradition has seen outgoing governments, recognizing their temporary role, refrain from implementing significant changes or introducing new schemes or plans during interim budgets since Independence

Harish Fabiani, Chairman, IndiaLand Group:

Being a part of the real estate sector, we are anticipating favorable announcements and incentives from the upcoming Union Budget that will accelerate the sector’s growth. We are keen on hearing positive changes with regard to the capital gains tax structure. I believe that rationalizing the capital gains tax could prompt more retail engagement in the REIT and infrastructure investment trusts (InvITs) space. Progressive reforms like the recent SEZ rule amendment and tax breaks could benefit commercial real estate and boost leasing activities, particularly in segments like commercial buildings and IT parks.

Similarly, by making input credit available to property developers during the construction phase, the upcoming budget can help bring down the cost and help support the growth of the commercial sector, which is projected to become a $40.71 billion market in 2024. Additionally, I anticipate the budget to have ample provisions and tax reforms for energy transitions by focusing on green real estate and infrastructure, promoting affordable and sustainable housing, and easing the means to do business for commercial property developers.

Above all, I am hopeful for policies and incentives that will help boost the flow of investments toward the commercial real estate industry, adding to the nation’s drive towards becoming a $5 trillion economy. I am particularly hopeful that favorable measures such as streamlining the regulatory process could help attract investments from NRI and other key investors. A positive take on granting the real estate sector an industry status could also help ease access to finance, boost investment inflow, and improve transparency in regulation.

Finance Minister Nirmala Sitharaman is poised to create history with her upcoming budget presentation on February 1, marking her sixth consecutive budget—a feat matching the record held by former Prime Minister Morarji Desai. As the first full-time woman finance minister in India, Sitharaman has already presented five full budgets since July 2019 and is now gearing up for an interim or vote-on-account budget. This milestone surpasses the achievements of her predecessors, including Manmohan Singh, Arun Jaitley, P Chidambaram, and Yashwant Sinha, all of whom presented five consecutive budgets.

“We anticipate a growth-oriented budget that positions real estate as a driver of progress, fostering sustainable development, incentivizing innovation, and supporting the housing segment with significant tax breaks. The industry flourished in 2023, and we hope the Union Budget includes provisions for a single window clearance system to enhance transparency and efficiency. Granting ‘Industry’ status to the real estate sector is also a long-awaited demand,” says Santosh Agarwal, Executive Director and CFO, Alphacorp.

Expectations are high for the upcoming Union Budget 2024, with the Real Estate developer community outlining its wishlist for government consideration.

Ramesh Ranganathan, CEO, K Raheja Corp Homes, said, “Elevating the Real Estate sector to industry status is key. We anticipate impactful policies, fostering industry growth with tax incentives measures making it more lucrative for homebuyers. The holding period for residential properties as a long-term capital asset should be shortened to 12 months, aligning with market dynamics.”

“In line with the government’s ‘housing for all’ focus, boosting home purchases through elevated tax deductions both for developers and buyers is crucial, making home ownership more affordable and enticing,” Ranganathan added.

The Finance Minister faces a crucial challenge in addressing the escalating expenses of medications, particularly for individuals managing chronic conditions. Will there be a reduction in the cost of medicines in the upcoming interim budget for 2024?

“Affordable health care, including affordable drug prices, is paramount to the nation’s prosperity. High costs often lead to non-adherence and abandonment of treatment, ultimately exacerbating health problems. Potential initiatives to curb this critical issue are likely to include reductions in Goods and Services Tax (GST) on essential drugs or tax concessions for pharmaceutical companies manufacturing generic versions of crucial medications,” Dr Gayatri Kamineni, COO, Kamineni Hospitals told Financial Express.com. (Read More)

Harish Trivedi, CEO, Cancer Treatment Services International – South Asia:

Ahead of the interim budget 2024, while I appreciate the PMJAY, and holistic healthcare approach of the GOI, yet a lot needs to be done for the growing chronic disease burden for a country as large as India as we are on cusp of chronic disease burden especially disease like cancer which growing at 12% and will require a serious approach. I would expect that the Budget allocation needs to be at least 3.5 to 4% of the GDP with a committed focus on Preventive healthcare architecture which emphasis on creation of Healthcare Infrastructure in Rural and underserved areas to improve healthcare accessibility, availability, and affordability.

GST and Custom duty relief for the advance medical technology is a must as this has helped India becoming a key Medical Value travel destination for more than 130 countries. Incentivise Private sector for more PPP healthcare models which can help Govt reduce chronic disease burden faster by leveraging the sectoral efficient capabilities. Inclusion of newer therapies in Govt/Private Insurance coverage is must to make real benefits of PMJAY to the needy population. Additionally, the continued focus on investment in AI and other healthcare technology like telemedicine through capex needs to be encouraged continuously. It’s also high time that the Govt creates a mechanism like PLI for Private healthcare sector as well.

Ramesh S Ramakrishnan, Chairman, Transworld Group:

The Budget 2024 being an Interim budget will focus on development of Infrastructure – Railways and Road being of primary focus. A lot of attention will be given to infrastructure development of semi urban areas, tier 2 and tier 3 cities. We expect policies and incentives to be introduced to drive major growth and development of clean energy resources. We also expect to see strengthening of public private partnerships in promoting coastal shipping as energy efficient and low cost mode of transportation.

Nikhil Bothra, Director at EPACK PREFAB:

The infrastructure industry in India is expected to continue to grow at a CAGR of 9.57% during the forecast period of 2024-2029. More the industry grows, the more the need for time and cost-effective solutions to build infrastructure. Additionally, the demand for green buildings is on a steady rise, more so in the Asia Pacific region.

As we strive for a $5 trillion economy, a more efficient construction approach is needed. PEBs offer a practical solution, allowing for quicker construction while also maintaining the quality and meeting environmental standards. Constructive regulatory framework would enhance the utilisation of PEBs within the industry. Considerations such as lowering GST or incentivizing the use of Pre Engineered Buildings (PEBs) in government infrastructure projects could be instrumental steps in this direction.

The budget recommendations by CII include maintaining the fiscal deficit target at 5.9% of GDP for FY24, transitioning the Goods and Services Tax (GST) to a three-rate structure, sustaining capital expenditure with a minimum 20% increase to Rs 12 lakh crore, extending the interest subvention scheme for low-cost housing up to Rs 35 lakh, boosting labor-intensive sectors, prioritizing agriculture and rural development, streamlining business regulatory approvals, establishing a dedicated Micro enterprise vertical in the Ministry of MSME, rationalizing import tariffs with a three-tier duty structure, and increasing combined spending on healthcare and education to 2.5-3% and 6% of GDP, respectively. The recommendations also emphasize incorporating Digital and AI skilling into the general curriculum. (Read More)

India‘s emerging space sector is advocating for a more permissive FDI policy, akin to the defense industry, and production-linked incentives in the upcoming interim Budget. The Indian Space Association (ISpA), representing the industry, has additionally appealed for a GST exemption for satellite, launch vehicle, and ground equipment manufacturing. The sector is also seeking lower tax rates for external commercial borrowings and a reduction in the withholding tax for the satellite industry from 10% to 2%, considering the industry’s narrow profit margins.

The ailing tea industry in Assam needs proper promotion, particularly overseas, so that it can tap new markets, according to Nalin Khemani, Chairman of Bharatiya Chai Parishad.

“The commerce ministry must ensure that our exports improve; they promote our tea. There is an oversupply in our domestic market, and the export demand is tepid. If the government takes up with the Tea Board to introduce a tea promotion policy, we can tap new overseas markets,” he told ANI ahead of the Union interim budget.

The Budget session of Parliament, the last session before the general elections expected in April-May, will begin on January 31 and is likely to continue till February 9, sources had said.

Harish Fabiani, Chairman, IndiaLand Group:

Being a part of the real estate sector, we are anticipating favorable announcements and incentives from the upcoming Union Budget that will accelerate the sector’s growth. We are keen on hearing positive changes with regard to the capital gains tax structure. I believe that rationalizing the capital gains tax could prompt more retail engagement in the REIT and infrastructure investment trusts (InvITs) space. Progressive reforms like the recent SEZ rule amendment and tax breaks could benefit commercial real estate and boost leasing activities, particularly in segments like commercial buildings and IT parks.

Similarly, by making input credit available to property developers during the construction phase, the upcoming budget can help bring down the cost and help support the growth of the commercial sector, which is projected to become a $40.71 billion market in 2024. Additionally, I anticipate the budget to have ample provisions and tax reforms for energy transitions by focusing on green real estate and infrastructure, promoting affordable and sustainable housing, and easing the means to do business for commercial property developers.

Above all, I am hopeful for policies and incentives that will help boost the flow of investments toward the commercial real estate industry, adding to the nation’s drive towards becoming a $5 trillion economy. I am particularly hopeful that favorable measures such as streamlining the regulatory process could help attract investments from NRI and other key investors. A positive take on granting the real estate sector an industry status could also help ease access to finance, boost investment inflow, and improve transparency in regulation.

Mahankali Srinivas Rao, CEO, T-Hub:

The upcoming budget holds immense significance for these ventures. Continued tax breaks and fiscal incentives, as announced in previous budgets, remain crucial for boosting early-stage funding.

Here’s what the startups are expecting out of the Interim Budget:

– Tax Optimization and Carry-Forward Losses

– Dedicated Funds for Sustainable Growth

– AI-powered Transformation

– Tech Industry Incentives for Innovation

– Enhancing Funding Opportunities

– Simplified GST Structure

– Dedicated Startup Funds for Emerging Industries

The displaced Kashmiri Pandits called upon the Centre to enhance their monthly relief allowance and introduce a new employment package entailing 5,000 jobs in the Kashmir Valley, a plea they hope will be addressed during the upcoming Budget session. Currently, a Kashmiri Pandit family without any government employee among its members receives Rs 13,000 per month for sustenance, a figure that has remained unchanged for the past decade. Families with government employees, on the other hand, are excluded from such relief. The community also emphasized the need for a revamped employment package specifically designed for them in the valley, building upon the prime minister’s package in 2010.

Finance Minister Nirmala Sitharaman is set to deliver the final Budget under the current Narendra Modi government on February 1. Given that this Budget coincides with the Lok Sabha elections year, it is expected to be an Interim Budget or a Vote on Account. The looming question is whether the Finance Minister will unveil significant relief measures for income tax payers and those on salary. Additionally, there is speculation surrounding the revision of income tax slab rates for the fiscal year 2025, encompassing both the old and new income tax regimes. Follow this space for the latest updates about the forthcoming Budget and the expectations of various sectors of economy with it.