Half Measures for Construction sector by Govt.

As earlier predicted anticipated by Pundits and Big wigs of construction sector, the budget 2000-2001 has been a big let down. No proper infrastructure study has gone on it by the Finance Department. Sole beneficiary has been Housing sector / real estate market. Though not wholly. The slab of repayment of loans on housing was increased from Rs. 10,000 to 20,000 under section 88. Removal of two percent interest tax on banks and financial institutions may bring down cost of funds by 0.3% 25 lakh dwelling units in rural and urban areas get a increased fund allocation. Exemption to pre-fabricated construction system, from excise duty.
This may boost the supply in construction but the speed factor has not been considered. There is no duty exemption for import of new equipment.
Though an abundance of funds is made available to the Housing Sector but no means have been suggested in its utilisation.
Tax exemptions on purchase of second house though is welcome , but feasibility is out if no rental reform are pushed through and translate into more rental stock.
As the representative of the construction sector say that the govt. has just scratched the surface of the problem without delving deep. The understanding and solutions are totally absent.





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