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Land acquisition and policy paralysis issues should be addressed

No Comments Sub Category:Construction,Other cities,Realty News Posted On: Feb 25, 2013

landThe construction sector in the past 2-3 years has been witnessing order inflows with land acquisition and policy paralysis issues being the key factors.

It is expected that the upcoming Budget will usher in solutions in terms of allocation across segments like roads, urban infra, irrigation, power and so on. The realty industry expects that the MAT (minimum alternative tax) will be abolished for the tax holiday period in order to improve the viability of infrastructure projects.

According to an official, there has been a complete standstill in the  road infrastructure sector due to innumerable problems with the National Highways Authority of India (NHAI). Around 9,700 km of land had to be released in the year 2012-2013 but the orders were placed only for 1,100 km.

Talking about the port segment, the problem lies mainly with the funding for infrastructure development across all major ports with an aim on implementation and privatization of the technology.

As per a senior official from Kolkata Port Trust (KoPT), about Rs 20,000-30,000 crore should be allocated each year across all the major ports. However, last year the ports were asked to generate Rs. 5,000 crore worth of  tax-free bonds. But they were not given any guidelines on how to function. Hence they are hoping for clarity this year.

Apart from that, dredging also is one of the major issues. Despite Rs. 400 crore being allocated last year, there were unsatisfactory remarks that dredging work was not up to the mark. The allocation should be raised by focusing on dredging.

The upcoming Budget 2013 is expected to cater to the clarity of availing the financing from the sector. As per an official, the budget should aim at speeding up the infrastructure development via non-banking finance companies (NBFCs). Firms which are into infrastructure financing are not functioning quite well as the rules being implied are mostly in favor of the banks.

It is very important that the firms involved in infra projects should be granted relief from taxation to facilitate financing by NBFCs which will apparently help in the growth of the sector. Also the NBFCs are liable to pay higher taxation as they are not allowed to the provision their NPA (non-performing assets).

Related Real Estate News:

TDR – Helpful in land acquisition

MPs question land acquisition bill

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