From liquidity to stress fund: Real estate, homebuyers’ Budget expectations

Union Budget 2019: The real estate sector is looking to the FY20 Union Budget, which will be announced on July 5, to help it recover from its liquidity woes. Meanwhile, homebuyers are also hoping for announcements that would ease their hardships. In 2017, real estate contributed about 6-7 per cent to India’s gross domestic product (GDP). Further, the sector is expected to contribute about 13 per cent to the country’s GDP by 2025 and is seen becoming the third largest globally at around $1 trillion by 2030, according to a 2018 KPMG report. It was worth $120 billion in 2017. Budget announcements that give a boost to the real estate sector could provide a positive push to the slowing economy, as well as create more jobs.

ALSO READ: Big listed real estate companies drive profits home in a dull market

Solving the liquidity crisis

The real estate sector is hopeful the government will resolve the liquidity crisis it is facing. Bhutani Group CEO Ashish Bhutani says, “A vital reduction in interest rates will spur a drastic improvement in the existing liquidity crisis and will ensure the money flow in banks and NBFCs.”

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Budget 2019: Steps needed to bolster transport infra, boost India’s growth

Union Budget 2019: Transportation infrastructure and allied services are critical growth engines for propelling India’s rise as an economic superpower. While the public sector has played a dominant role in investing in infrastructure creation, the government will need increased private sector participation to supplement the rapidly growing industrial demand for a modern and robust transportation and logistics network at par with developed countries. The infrastructure sector was one of the major focus areas in the FY19 budget and saw massive spending on roads, railways, water, irrigation, and urban infrastructure. With all eyes on the upcoming Union Budget, the Government should focus on not only allocation of funds, but also on setting up a road map for clearly outlining the private and government sectors’ role in infrastructure creation and operations over the next year. Some interventions which may be considered by the Government for boosting the transportation and logistics sector in the country are proposed below:

Railways: With elimination of level crossings and other measures, the Railways’ track record of safety improved last year. However, there is still a long way to go for Indian Railways. Replacing walking inspection with automated inspections, upgradation of track management system into a dynamic asset maintenance and management system, improved mechanisation of track maintenance organisation across zones and greater use of RCM/CBM and IoT for real time monitoring and predictive maintenance of assets are a few steps,which would go a long way in ensuring safety.

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Budget 2019: Sitharaman urged to bring cigarette taxation to pre-GST level

Budget 2019: The Federation of All India Farmer Associations (FAIFA) has urged Finance Minister Nirmala Sitharaman to correct an error in cigarette taxation under the new tax regime, which did not account for the cascading effect on excise duty that existed in the pre-GST system.

FAIFA is a non-profit organisation that represents the cause of farmers and farm workers of commercial crops across the states of Andhra Pradesh, Telangana, Karnataka and Gujarat.

In a letter written to the Finance Minister, which has also been submitted to various concerned Ministries including the PMO, Ministry of Health and Family Welfare, Ministry of Agriculture, Ministry of Commerce and Industry, Ministry of Labour, the association has highlighted that error in cigarette taxation has inadvertently increased compensation cess rates that has resulted in additional taxes of around 13 per cent above the pre-GST levels.

“Any additional burden caused by the increase in compensation cess rates will put further pressure on the livelihood of Indian tobacco farmers. As observed in the past that increase in taxes have resulted in the inflow of huge quantities of illicit cigarettes in the market,” the FAIFA letter to Sitharaman said.

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PM Modi’s July 5 budget key to reviving India’s animal spirits

Union Budget 2019: India’s economy showed signs of fragility in May after April’s uptick, suggesting a sustained recovery needs a fiscal stimulus from newly re-elected Prime Minister Narendra Modi’s government.

Overall activity from eight high-frequency indicators compiled by Bloomberg News show the economy lacked momentum, with the dot remaining unchanged from a month ago. A renewed tightness in liquidity conditions kept business activity subdued. The dashboard is a measure of “animal spirits,” a term coined by British economist John Maynard Keynes to refer to investors’ confidence in taking action.

As gross domestic product growth slowed to a five-year low of 5.8% in the first quarter of 2019, the Reserve Bank of India this month did its part to support the economy by lowering interest rates for a third time and switching to an accommodative stance. Further, analysts expect the new Modi government’s first budget on July 5 to tweak fiscal levers to give a boost to the economy and get it back on a faster growth track.

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Budget 2019: 7 ministries, depts yet to earmark funds for tribal schemes

Seven central ministries and departments have not earmarked funds for tribal welfare schemes in their budget for 2019-20 and 12 have “kept the provision below the level stipulated by the Niti Aayog”, officials said Wednesday. Union Budget 2019

In 2017, the Niti Aayog developed new guidelines obligating 41 central ministries and departments to earmark funds for “Development Action Plan for Scheduled Tribes” (DAPST), earlier known as Tribal Sub-Plan.

An official said the guidelines were finalized in January 2019, which means complete adherence cannot be ensured this financial year.

“Since the ministries decide their allocations for various schemes by November-December and the guidelines were finalised in January, any corrective action is possible next year only,” the official said.

The guidelines state that the 41 identified ministries and departments have to earmark at least 4.3 per cent funds for DAPST.

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India likely to let budget deficit rise as tax receipts fall short

The government is likely to overshoot the budget deficit target previously set for the current fiscal year, three officials have warned, as a slowing economy creates a big shortfall in tax collections and prompts new stimulus plans. Budget 2019

New Finance Minister Nirmala Sitharaman presents her first budget on July 5, for the fiscal year ending March 2020. It is also the first budget of Prime Minister Narendra Modi’s second term after his government was returned in a landslide election win last month.

Since becoming prime minister in 2014, Modi succeeded in improving public finances, trimming the fiscal deficit to 3.4% of gross domestic product (GDP) from 4.5% in 2013/14, mostly through subsidies cuts and fuel taxes.

He is now, however, under pressure to loosen the purse strings to follow through on election promises such as increased spending on roads and housing and tax cuts for companies and individuals.

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Budget 2019 wishlist: Here are the key challenges for oil and gas sector

Declining domestic crude production: Most of the producing fields (in Cambay, Assam-Arakan and Mumbai Offshore) are maturing or have already matured. Due to inadequate new oil and gas discoveries and subsequent development, India is witnessing a decline in crude production.

Large crude import bills: In 2018-19, India imported more than 80% of its crude consumption and spent in excess of $110 billion. Union Budget 2019

Inadequate transmission & distribution infrastructure: India needs to invest heavily in midstream and downstream sector to overcome infrastructure constraints in LNG, gas pipelines and CGD.

Technology constraints: The country needs investment in exploring and developing Category-2 and Category-3 basins. However, Indian operators do not have the requisite technology and experience in this area. Low share of MNCs: Despite being one of the largest consumers of energy, India has a low share of MNCs in the domestic market.

Environmentally friendly fuels: India continues to rely heavily on coal and petroleum products to meet its energy needs.

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I wanted to commit suicide after loss to India: Pak coach Mickey Arthur

Pakistan’s head coach Mickey Arthur has claimed that his team’s defeat to arch-rivals India had left him so shattered that he wanted to “commit suicide“.

Pakistan were incredibly hurt by the scathing reactions from the media, fans and former cricketers after their 89-run loss to India in Manchester on June 16.

“Last Sunday I wanted to commit suicide,” Arthur was quoted as saying in the media here.

“But it was, you know, it’s only one performance. It happens so quick. You lose a game; you lose another game; it’s a World Cup; media scrutiny; public expectation, and then you almost go into sort of survival mode. We’ve all been there,” he added.

Pakistan won their next game against South Africa to keep a slim chance of entering the semifinals alive.

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Companies may soon have to pay GST on inter-state office services like HR

In-house functions of an organisation’s office such as human resources, accounts and payrolls, if carried out from a centre in one state for offices in other states, will come under the GST net, Economic Times reported on Tuesday. Invoices for the same will have to be issued.

What this means is that companies with multi-state offices will suffer as services provided by an office in one state to another office in any other state will face goods and services tax. The move would add to their transaction costs and compliance burden. Moreover, the issue of cross charge is likely to lead to a lot of confusion on the ground.

Union Budget 2019

A circular endorsed by the GST Council, will be issued soon, a government official told ET, and it will spell out how the input tax credit will be distributed between head office and branch officers as also that value of service will be equal to employee cost and establishment cost of supplying that service.

In December 2018 the Karnataka Appellate Authority for Advance Rulings upheld the levy of goods and services tax on services rendered by one office branch to other centres. AAR, had passed the order in a case pertaining to Columbia Asia Hospitals, and had said companies are required to be cross charged and levy GST on the same.

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ENG vs AUS Preview ICC CWC 2019: Australia’s might to test England’s guts

After suffering a shock defeat against Sri Lanka, England cricket team will look to get back on winning track and take one step closer towards the semi-finals when they face arch-rivals Australia cricket team in their crucial ICC World Cup 2019 game at the iconic Lord’s on Tuesday. With four wins from six games, England are currently at the fourth spot in the ICC World Cup 2019 Points table.

The hosts, who came into the tournament as overwhelming favourites, are in a bit of a tight situation as they need to win at least two of their remaining three games to enter the last four.

However, it would not be an easy task for them, especially considering they have to face India and New Zealand after their Australia game. England’s record against all the three teams is not great as they have not been able to register a single World Cup win against Australia, India and New Zealand in the last 27 years.

Thus, the pressure will surely be on Eoin Morgan and team to come out with a fearless brand of cricket which they have playing in the last two years. To add to their woes is the unavailability of Jason Roy, who has been sidelined due to hamstring injury.

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