The Union Budget presented on Monday failed to bring much cheer for the construction industry with builders in the city failing to find much for them in it. Neither the interest subsidy on low cost housing nor the possibilities of cement and steel becoming cheaper are motivating them.
Towards giving a boost to housing sector finance, the budget sought to liberalise existing scheme of interest subvention of 1 per cent on housing loans by extending it to housing loans up to Rs. 15 lakh where the cost of house does not exceed Rs. 25 lakh from the present limit of Rs. 10 lakh and Rs. 20 lakh respectively.
“This is not going to help since one cannot get a dwelling at Rs. 15 lakh or Rs. 20 lakh even in two-tier cities, forget Hyderabad. I can say the budget is not really encouraging for housing and construction industry,” says Suraj Prasad Agarwal, city based builder and past-president, Federation of Andhra Pradesh Chambers of Commerce and Industry.
“Our plea on infrastructure industry status has not been addressed and neither any clarity nor incentives were provided on other issues such as sales tax on labour component,” points out Anand Reddy, PBEL Executive Director.
“There is nothing major to talk about for us in the budget,” quips Ravinder Reddy, Chairman and Managing Director, Janapriya Projects. Not much on construction material too.
“Incentives or concessions of any kind offered on raw material will benefit the cement and steel manufacturers. It will help the builders when the benefits are passed on to them by the manufacturers,” says Mr. Agarwal.
“But then, construction material is just a small part of so many other costs and taxes that we end up paying. Meagre concessions here are not going to be of much help for us,” Mr. Anand Reddy adds.
