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Budget 2012: Increase Infrastructure Spending in Urban Areas, Says PVR Murthy, Yash Birla Group

  • With the Finance Minister, Pranab Mukherjee set to deliver his budget speech on March 16, PVR Murthy, Group Finance Director, Yash Birla Group is of the opinion that the government has no option but to raise both excise and service taxes this year.He also feels that there are issues with respect to withholding taxes that need to be taken care of. In his pre-budget expectations, PVR Murthy, Group Finance Director, Yash Birla Group has highlighted the following measures that he expects the Finance Minister to announce with respect to the infrastructure, health, real estate and education sector:

  • 1) Infrastructure - Without any dichotomy - the future growth prospects of the Indian economy lingers primarily on the infrastructure investment and timely execution of the projects. Thus, one such initiative would be to develop a huge amount of long-term corpus towards infrastructure development through dedicated debt funds (the most recent example being tax-saving infra bonds).

  • According to RICS India, in order for India to achieve its envisaged 10% growth during the coming financial year, the requirement for sustainable infrastructure development is crucial to provide impetus to the economic activities and achieve optimum resource utilization.

  • To overcome slow growth, the government should take steps to up its allocation for the infrastructure sector from the 2011-12 budgetary allocation of Rs 2,14,000 crore. The sector, which saw a muted growth in 2011, hurt by the double whammy of slow policy-making and low private sector investment, hopes growth will be there in the year 2012.

  • Increase infrastructure spending in urban areas with a view to unlock the value of neglected and hidden land assets in suburban and peripheral districts'. Increase outlay to Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Grant industry status to real estate, since the sector is a major driver for economic growth and generates countless jobs across its various verticals and associated industries. Relax norms for repatriation of FDI in real estate.

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