The Finance Minister has presented a growth-oriented Budget with focus on infrastructure. The Government has reiterated its commitment towards Housing for All by allocating ₹48,000 crores towards PM Awas Yojana, around the same as that spent last year under this scheme. Housing for All has been the government’s focus since 2014. Housing security is a basic need and intrinsic to the development of a nation.
Creation of unified logistics platform, highway expansion by 25,000 kms in FY23 and developments of 100 new cargo terminals in the next three years are significant steps in improving the supply chain ecosystem in the country. This will give a boost to the logistics sector, which in turn will benefit many other sectors.
Credit support
Interventions to improve credit to the pandemic afflicted MSME sector including hospitality industry is also a step in the right direction. All MSMEs will have extended access to credit support up to 40% of their credit outstanding till March 2023.
‘Infrastructure’ status given to Data Centres, will enable preferential and cheaper credit for this already fast-growing industry. This announcement will greatly help in sharp growth of data centre capacity in the country and support India’s ambitions of being a strong Data Centre player in the region. The Indian data centre market currently houses an estimated 445 MW of critical IT capacity and we estimate that further around 290 MW of IT load will be added in 2022. The government should also have looked into the long-standing demand of granting infrastructure status to the real estate sector as that would have provided a strong support to the overall industry.
The Minister of Finance has said that the SEZ Act will be replaced with a new law by September 2022. Further details on this will be keenly awaited given the significant impact of this on the commercial real estate sector.
Customs administration
Overall, the new legislation is expected to boost exports, enhance competitiveness and remove anomalies. The government will also undertake reforms in customs administration of SEZs and make it fully IT driven. This shall enable ease of doing business in SEZ units. Many measures have been around digital adoption and ease of doing business initiatives which will improve business efficiency and go a long way in driving economic growth.
The adoption of Unique Land Parcel Identification Number (ULPN) will facilitate IT-based management of records and will reduce the time required for all land and construction-related approvals. States across India will be encouraged to adopt ULPN to facilitate IT-based management of records.
The adoption or linkage with National Generic Document Registration System (NGDRS) with the ‘One-Nation One-Registration Software’ will foster a uniform process for registration and ‘anywhere registration’ of deeds and documents thus easing the process.
Currently, the 1% TDS on property sale above ₹50 lakhs is basis the consideration value of the immovable asset. But now, after an amendment in the Income Tax Act, TDS will apply on basis of sale price or the stamp duty value, whichever is higher.
The writer is Chief Economist & National Director — Research, Knight Frank India.
