Luxury homes for the rich to become more expensive

Ireo Gurgaon Hills

Ireo Gurgaon Hills

Luxury homes for the rich would become more expensive after the finance minister today reduced the abatement on service tax availed by real estate developers for homes and flats above 2,000 sq ft or costing Rs 1 crore and above to 70% from 75% earlier.

The impact will be amplified in Mumbai for almost every buyer of under-construction apartments as the city no more offers any decent size apartment at less than Rs 1 crore, the criteria used for applying the measure.

The rate of abatement or deduction is used in calculation of service tax to be paid by the developer. Reduction in abatement will result in higher input cost that will be considered for calculation of service tax.

“Buyers in tier II and III cities will not be affected much as there are not many projects falling in category and therefore the definition of luxury housing is apt for those cities. However, for metros like Mumbai and Delhi, even the basic housing cost is Rs 1 crore and this proposal will affect almost every buyer here,” said Anuj Puri, chairman, Jones Lang LaSalle India.

Read more: The Economic Times

Economy

Delhi bags 27% more this Budget, infrastructure gets biggest share

Infrastructure and development in Delhi got a boost on Thursday with the Union Budget including a Rs 200 crore increase in funds from last year’s Budget for Jawaharlal Nehru National Urban Renewal Mission (JnNURM). In all, the Delhi government received a 27 per cent increase from the previous year — Rs 1,143 crore for the 2013-2014 compared to Rs 900.

“The increase in JnNURM funds from Rs 500 crore to Rs 700 crore will let us implement more infrastructure projects in the city,” Chief Minister Sheila Dikshit said.

She said of the Rs 243 crore increase in allocation, Rs 200 crore was for JnNURM.

“Taxes on big companies and very wealthy people and no pressure on the common man is an excellent step. This is a women-oriented budget with the FM announcing a Nirbhaya fund and a bank exclusively for women,” she said.

Under JnNURM head, allocation for Rajiv Awas Yojana increased to Rs 80 crore this year, compared to the Rs 5 crore in the revised 2012-2013 budget. “The submission on Urban Infrastructure Governance has been increased from Rs 350 crore to Rs 470 crore. Rs 5 crore has been increased under Housing for Urban Poor,” she said.

Read more: Indian Express

Union Territory Chandigarh gets increased Budget allocation for 2013-14

UT administration’s Budget allocation for 2013-14 has gone up by 19% in plan and 20% in non plan over the previous year. Chandigarh has got special allocation for purchase of 150 new buses, a government college for girls, 150 schools and a polytechnic.

In plan, an increase of 19% has been given and has fixed the ceiling of plan Budget to Rs 876.05 crore as compared to current year’s Budget allocation of Rs 737.23 Crore. Under non plan Budget against the BE (Budget estimates) of Rs 2178.78 crore last year, the BE 2013-14 has been fixed at Rs 2615.56 crore. There is an increase of 20% in non plan Budget.

The important thrust areas of the next year’s plans are education (19.83%), health 12.21%), urban development (29.72%), transport (15.00%), housing (5.54%), social security and social welfare (2.18%). In the next year’s plan, there will be an effort to upgrade the city of Chandigarh further by providing better infrastructure, implementation of IT and responsive governance system.

Meanwhile, municipal corporation has been allocated funds to the tune of Rs 146.60 crore in Plan BE (2013-14) to carry out various developmental works under different services.

Banks seeks to capital access, deposit sops in Budget

Access to capital, issue of new bank licences and measures to help banks shore up their dwindling deposit inflows are the key expectations that the banking sector has from the Budget.

As per RBI estimates, the Government will have to infuse additional capital of Rs 90,000 crore to retain its shareholding in the public sector banks (PSBs) at current levels to meet Basel III norms over the next five years.

Thus, topping the wish list is the expectation of capital infusion of nearly Rs 20,000 crore into PSBs in FY14. While this will be positive for all PSBs, it will also help revive the overall credit cycle.

Lid on freebies

The passing of the ‘Banking Laws Amendment Bill’ in December has paved the way for new banking licences.

While the final guidelines are yet to take shape, further clarity on the entry of corporate players will be keenly watched.

Read more: Business Line

Infrastructure Debt Funds will be encouraged

Infrastructure Debt Funds will be encouraged to boost the economy, Finance Minister P Chidambaram said, adding that doing business in India must be seen as easy and friendly.

Chidambaram has allocated Rs 500 crore to start programme of crop diversification.

He has also given Rs 80,194 crore to Ministry of Rural Development in Budget 2013.

Giving the emphasis on education, Chidambaram said Budget 2013 will allocate Rs 65,867 crore to the HRD ministry. My budget’s overarching goal is to create opportunities for our youth, he said.

More than the fiscal deficit, Chidambaram said his greater worry is the current account deficit.

In his Budget speech, he said the ‘passion for gold’ is one of the contributing factors.

The Economic Survey 2013 has recommended focusing on curbing imports in order to control a ballooning current account deficit (CAD). According to the survey oil prices should be more market determined to reign in the CAD.

The survey says that curbing gold imports will help the government reign in the deficit and has noted that the room to increase exports in the short run is limited.

Read more: The Economic Times

Infrastructure

Road regulatory authority proposed in FY14 to settle issues

P Chidambaram in his budget speech today said that a road regulatory authority would be constituted this year to address issues such as financial stress, construction risk and contract management in the sector.

A road regulatory authority would be constituted this year to address issues such as financial stress, construction risk and contract management in the sector.

Finance Minister P Chidambaram in his budget speech today said that the road construction sector has reached a certain level of maturity but it faces challenges, including financial stress, enhanced construction risk and contract management issues.

He said that these issues are better addressed by an independent authority. Therefore, the government has decided to constitute a regulatory authority for the road sector.

Road Secretary Vijay Chibber said, “Hopefully during this year we will be able to constitute the road regulatory authority.”

The key functions of the proposed regulator are likely to be tariff setting, regulation of service quality, assessment of concessionaire claims, collection and dissemination of sector information, service-level benchmarks and monitoring compliance of concession agreements, among others.

Read more: The Economic Times

Budget gives a Rs 3,120-crore push to Metro Phase III project

Rs 120 crore set aside for expansion of Metro in the NCR — Faridabad and Bahadurgarh.

The Delhi Metro Rail Corporation (DMRC) on Thursday got an increased budgetary outlay of Rs 3,120 crore for 2013-14, for the construction of Metro Phase III in the capital.

The Union Budget outlay for the Delhi Metro for the 2012-13 was Rs 2,200 crore. The Phase III Metro — with seven corridors covering nearly 140 km of the city — will be the largest expansion project by the DMRC so far.

A major highlight of the Metro expansion is that it connects two arterial roads — the Ring Road and the Outer Ring Road. Phase III will also extend to the satellite cities of Faridabad and Bahadurgarh.

For the NCR expansion alone — to Faridabad and Bahadurgarh — the Delhi Metro has received Rs 120 crore.

Read more: Indian Express

Govt allows FIs to raise Rs 50,000 cr via tax-free bonds

To encourage investment in infra sector, some FIs have been allowed to raise about Rs 50,000 cr from tax-free bonds.To encourage investment in the infrastructure sector, some financial institutions have been allowed to raise about Rs 50,000 crore from tax-free bonds in 2013-14.

“I propose to allow some institutions to issue tax-free bonds in 2013-14 strictly based on the need and capacity to raise money in the market up to a total sum of Rs 50,000 crore,” Finance Minister P Chidambaram said, while presenting the Union Budget 2013-14 in Parliament.

Institutions allowed to issue tax-free bonds raised Rs 30,000 crore in 2011-12, and are expected to raise about Rs 25,000 crore in 2012-13.

Emphasising on the need to create new and innovative instruments to mobilise funds for meeting the 12th plan target of investments up to USD 1 trillion or Rs 55,00,000 crore in the infrastructure sector, Chidambaram said, “Infrastructure Debt Funds (IDFs) will be encouraged”.

These funds will raise resources and, through take-out finance, credit enhancement and other innovative means, provide long-term low-cost debt for infrastructure projects, he added.

Read more: The Economic Times

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