Putting In­dia Firmly Back on Growth Track

Mea­sures for af­ford­able hous­ing, tourism and MSMEs could be po­ten­tially trans­for­ma­tive

The Economic Times - - Front Page -

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

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