Dipen Agrawal, President, CAMIT

Chamber of Association of Maharastra Industry and Trade (CAMIT) has sent a budgetary proposal to Finance Minister Nirmala Sitharaman with demands and suggestions to help bring back economy on track, which has been affected by the COVID-19 pandemic.

Dr Dipen Agrawal (President, CAMIT) has said that since the last year and half, every economy has been affected badly due to the COVID-19 pandemic and India is no exception to it. Initially the impact of the 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.

Dr Agrawal appreciated government’s efforts to convert the crisis into an opportunity to ensure people consume products made in India and also become part of global supply chain. The Government of India announced 20 Lac crore package; emergency credit line guarantee scheme (ECLGS) and modified the package from time to time to accommodate more and more sectors. But Dr Agrawal said that the expectations from the upcoming Union Budget 2022 are high as the impact of pandemic can be seen even now on everyone’s lives, businesses and countrys economy.

Dr Agrawal opined that the government has to support demand in the short and for that it needs to spent with open hands but judiciously. He said: “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.

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.

We have also recommended increasing the limit for repayment of housing loan principal to boost the overall home buying sentiment especially in the difficult times of 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 Agrawal said that for affordable housing, CAMIT has requested Finance Minister 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, the size of the apartments should be increased to 90 sq. meters in metros and 120 sq. meters in non-metros from 60 sq. meter and 90 sq. meters respectively. The eligibility of the projects should also be extended under affordable housing to March 31, 2023. CAMIT has also suggested Finance Minister to impress upon state governments to reduce stamp duty for real-estate transaction.

Dr Agrawal added: “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, it is the first to 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 meetings, conferences and exhibitions to come under IGST (this will help the companies to avail GST input credit) and reduce number of licenses required for hospitality industry.

MSMEs and mega industries both are feeling the heat due to increase in raw material cost. CAMIT has requested Finance Minister 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 also suggested to rationalise non-corporate and personal income tax rates and enhance exemption limits for individuals particularly the health insurance premium in the given situation.”