Features: Magazine | Literary Review | Life | Metro Plus | Open Page | Education Plus | Book Review | Business | SciTech | Friday Review | Cinema Plus | Young World | Property Plus | Quest | Folio |

Renewed interest: Subsidy for building houses in backward areas has been increased in the budget.

The present budget has been acclaimed as a ‘middle class budget’ and stated to be benign to the ‘aam admi.’ This being the case, it goes without saying that the most important subject of infrastructure, particularly housing, should have received more than ordinary attention. No road blocks have been created in this area but there are only a few proposals of interest.

Building up of infrastructure is an ongoing programme. The Government is to provide Rs. 16,436 crore as equity support and Rs. 3,003 crore as loans to Central Public Sector Enterprises (CPSEs) during the year 2008-09. 44 CPSEs are listed already and more are expected to be listed in order to unlock their true value and improve corporate governance. The accent in the budget is more on rural areas. Urban infrastructure development is mainly through the Jawaharlal Nehru National Urban Renewable Mission (JNNURM). The Rural Infrastructure Development Fund (RIDF) is the main instrument for channelising bank funds for financing rural infrastructure. The FM has proposed to raise the corpus of RIDF IV in 2008-09 to Rs. 14,000 crore. It is also proposed to operate a separate window under RIDF IV for rural roads with a corpus of Rs. 4,000 crore.

Developing housing for poor being one of the six programmes under Bharat Nirman, the central theme has been rural housing under the Indira Awas Yojana (IAY). Loans from commercial banks for this purpose will be made available at Differential Interest Rate of four per cent up to Rs. 20,000 per unit.

The subsidy available has been hiked from Rs. 25,000 to Rs. 35,000 in the plains and Rs. 38,500 in hilly and difficult areas. This is expected to give further fillip to rural housing. The subsidy for upgradation of houses has been proposed to be increased from Rs. 12,500 to Rs. 15,000. In order to help women, houses constructed under the IAY should be allotted to a female member of the family or in the joint names of husband and wife. Only when there are no female members in a household should the allotment be made in the name of a male member. An annual outlay of Rs. 5,400 crore has been made to this segment. Three per cent of the funds of rural outlay will go to the disabled.

An outlay of Rs. 5,478.36 crore has been made for urban housing, with the National Capital Region of Delhi getting Rs. 2,978.36 crore. This will be spent on housing and other infrastructure for holding the 2010 Commonwealth Games. Allocation has also been made for the Delhi, Bangalore and Kolkata metros.

In order to refinance rural housing loans, the National Housing Bank (NHB) has been provided Rs. 1,200 crore.

Housing has many other components such as input cost, stamp duty and registration charges, service charges, interest on loans etc. Many of these areas have been untouched by the current budget.

Increasing global operating cost, coupled with the rising prices of coke and iron ore, are expected to push up global steel prices. The reduction from 16 to 14 per cent in CENVAT rates may counter- balance this and reduce the tonnage rate by around Rs. 500, leading to reduction in steel prices.

The excise duty on sales in MODVAT may neutralise the price as far as the industrial buyer is concerned.

The overall proposals may perhaps leave the infrastructural and housing segments in an ‘as is where is’ situation, except, of course the rural segment.

Printer friendly page  
Send this article to Friends by E-Mail