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India Inc. is not just hopeful but very confident that Union Budget 2009-10, scheduled on July 6, will continue its thrust on infrastructure development. A special pre-budget survey by Projectmonitor across a gamut of industries saw infrastructure run like an all-pervading theme through major economic segments. Industry captains perceive the emergence of the UPA-II government, now independent of the Left support that proved debilitating during UPA-I, as a major liberation. Industry is hopeful that with UPA-II in full possession of a popular mandate, it will have to deliver—and it will.
In the core infrastructure area—roads, ports, airports, power—the expectation heading the wishlist is tax exemption and ease in raising funds. This is apart from looking forward to some interest rate cuts, of which strong signals are already palpable given falling WPI-based inflation rates. Simplicity in raising funds from external commercial borrowings that could come in the form of dispensing mandatory RBI approval for ECBs and allowing infrastructure-centric lending agencies like IIFCL to open a refinancing window for infrastructure projects, experts feel.
What is interesting to note is that an overwhelming majority of industry captains feel that there is much scope for simplification of procedures and rationalisation of duty structure. In fact, some corporate chieftains feel that easing the bureaucratic labyrinth could take precedence over doling out incentives. In the wake of the global slowdown, this would be just the right time to initiate sweeping changes in the extant bureaucratic system that, lamentably, lacks clarity and uniformity.
India Inc. also feels that the country has simply not done enough on softer sectors like higher education, healthcare and insurance, to name a few. With over half of India's population less than 25 years of age, imparting basic, higher and specialised education should be the thrust area for the government, with policies suitably devised to allure private enterprise and capital.
The real estate sector—bruised and battered in the global meltdown and the liquidity crisis— is very hopeful that the budget will help the industry back on its feet. Realty players concur that in the coming years affordable housing will hold the key to prosperity. Developers are looking forward to tax incentives and lower interest rates so that the common man-the principal determinant of the incipient affordable housing revolution-can shape not just his home but the industry's fortunes as well. Be it real estate or infrastructure development or any other economic activity, the humble construction activity lies at the core, but unfortunately, still in a state of neglect. Imparting infrastructure status to the construction industry, the nation's second biggest employer after agriculture, has been a long-standing demand, reiterated in this year's budget wishlist.
The economic situation, globally and locally, and the political scenario are radically different from what India has seen in recent history. Hence, what is otherwise a routine fiscal document, Union Budget 2009-10, which unfolds on July 7, 2009, needs be to be radical. The industry has put down its wishlist, as it has always done and will do, but whether the budget will defeat, meet or surpass expectations, only time will tell.
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