Dr. Dipen Agrawal, President – Chamber of Associations of Maharashtra Industry & Trade (CAMIT) said that, last year and half every economy is under the shadow of Covid-19 pandemic and India is no exception to it. Initially the impact of covid19 lockdown was seen as supply side crisis with contraction in manufacturing but after containment was removed it turned into demand-side shock, because incomes had diminished. Government has attempted to convert the crisis into an opportunity to ensure people consume products made in India and also become part of global supply chain. Government announced 20 Lac crore package; Emergency Credit Line Guarantee Scheme (ECLGS) and modified time to time to accommodate more and more sectors.
Covid19 has impact on everyone`s lives, businesses and country’s economy and is continuing, the expectations from the upcoming Union Budget 2022 is high. Government has to support demand in the short and for that it needs to spent with open hands but judiciously. We strongly believe that reforms pay off with a lag. India had seen major reforms in 1991, but growth touched 8 per cent after 2000. For growth to return to its 8% plus levels enhancing reforms should continue and it should not be a single event.
Dr. Agrawal said that CAMIT has sent a memorandum of demand/suggestion for Union Budget 2022 to Union Finance Minister, Mirmala Sitharaman requesting her to bring back economy on fast track. To revive the economy real estate sector deserves serious attention in the upcoming budget. A healthy real-estate sector is need of the hour, because about 250 industries such as cement, steel, brick, timber, building materials etc. are dependent on the real estate sector.
Hence in order to have faster and all-inclusive economic recovery CAMIT in its memorandum has suggested government to increase limit of home loan interest deduction for tax rebate to Rs 5 lakh from current ceiling of Rs 2 lakh. Increase the limit for repayment of housing loan principal to boost the overall home buying sentiment especially in the difficult times of Covid pandemic. Incentive for alternative asset classes such as warehousing, data canters and co-working spaces has been announced but much more is needed to build momentum on both the demand and supply side.
Dr. Dipen Agrawal said that for Affordable Housing, CAMIT has requested FM to revisit and revise the definition of Affordable Housing to accommodate recent steep increase in raw material/input prices to increase the value of the apartments to Rs 75 lakhs in non-metro cities and Rs 1.50 crore in metro cities from the current ceiling of Rs 45 lakh. Alternatively, increasing the size of the apartments to 90 sq. meters in metros and 120 sq. meters in non-metros from 60 sq. meter and 90 sq. meters, respectively. Extend the eligibility of the projects under affordable housing to March 31, 2023 for benefit of the last mile homebuyers; he also suggested FM to impress upon state governments to reduce stamp duty for real-estate transaction.
Dr. Agrawal said that after second wave the hospitality sector was last on the list of government to permit resuming operations. The sector started experiencing recovery since a few months but after onset of third wave of covid pandemic they are first take the hit. In order to support the hospitality sector further, CAMIT has suggested that government should offer interest-free loans, subsidies, reduction in tax structure under Goods and Service Tax (GST) rates for hotels; Permit corporate bookings for meeting, conferences and exhibitions to come under IGST (this will help the companies to avail GST input credit); Reduce number of licenses required for hospitality industry.
MSME’s and Mega industries both are feeling the heat of increase in raw material cost CAMIT has requested FM to do some balancing. These measures will help boost retail sale/consumption which in turn can offer a huge impetus to trade and economic activities. CAMIT has suggested to rationalise non-corporate and personal income tax rates; enhance exemption limits for individuals particularly the health insurance premium in the given situation. I am positive and see this as a directional budget said Dr. Dipen Agrawal.
