Putting India Firmly Back on Growth Track
Measures for affordable housing, tourism and MSMEs could be potentially transformative
The ten themes of the Budget have a goal to “transform, energise and clean.” The Budget had a good balance of fiscal prudence, focus on capital expenditure, consumption and increasing productivity.
I would also like to highlight certain areas that could be potentially transformative.
The first is affordable housing which, in many ways, is a lodestone for the Budget’s objectives. There is a large, genuine and mostly unmet need for affordable housing, with an urban housing shortage of 18.8 million units, of which 96% is in economically weaker sections or low-income groups. Accordingly, the focus on this segment remains a must for the sustainable development of the nation.
The Budget initiatives have aptly captured multiple areas to promote the sector by: Encouraging investment by builders: Eligibility for profit-linked income tax exemption for sponsors has been increased, in terms of space, geography and period of exemption.
Increasing interest of lenders: Affordable housing has been given infrastructure status, with attendant benefits of attracting more capital and accessing lower cost funds. Further, NHB will refinance individual home loans of ₹ 20,000 crore. Improving buyer demand: As an allied development, lowering of tax slabs and recent softening of interest rates would also have a positive demand impact on the sector. Directly assisting weaker segment: To deliver one crore homes by 2019, outlays on the Pradhan Mantri Awas Yojana are proposed to be increased from ₹ 15,000 crore in FY17 to ₹ 23,000 crore.
Axis Bank has been at the forefront of fostering an ecosystem for credit delivery to this segment, with Asha Home Loan programme that started in 2014. We continue to see this as an opportunity to profitably aid the nation in sustainable development. Creating jobs has emerged as a big priority. India today has a huge demographic advantage in terms of the young population and it is of paramount importance that appropriate steps are taken to ensure that job creation keeps pace.
Housing is a labour-intensive industry, with a long backward linkages tail, generating a large multiplier of economic activity in sectors while significantly aiding in job creation. This also plays very favourably with aspirations of India’s youth, and will help in the realisation of the demographic dividend of this segment.
The other two focus areas, namely, tourism and MSMEs, would also have significant positive impact on job creation.
The government has progressively accelerated economic initiatives and policy reforms, which are gradually bearing fruit. This Budget continues to be a step in the right direction.
Creating jobs Is a priority and India has a huge advantage in its youth