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Budget set to push housing

A slew of fresh fiscal measures, including steps to boost the sagging real estate, automobile and export sectors are expected as the UPA government presents the Interim Budget for 2009-10 on Monday, reports Gaurav Choudhury.

business Updated: Feb 16, 2009 11:54 IST
Gaurav Choudhury

A slew of fresh fiscal measures, including steps to boost the sagging real estate, automobile and export sectors are expected as the UPA government presents the Interim Budget for 2009-10 on Monday, weeks ahead of expected general elections.

Officials familiar with the exercise told Hindustan Times that plan expenditure, the classification for development-related projects like infrastructure and anti-poverty programmes, is expected to increase by about 15 per cent in 2009-10.

The gross budgetary support for 2009-10 is expected to go up by about Rs 40,000 crore from the current year's Rs 2,43,386 crore. Bulk of the additional spending would be allocated towards flagship schemes such as the National Rural Employment Guarantee Scheme, the rural health mission and the education sector.

All told, the budgetary allocation for the flagship schemes for 2009-10, which will be indicated in the Interim Budget, is likely to be over Rs 1,10,000 crore, as against the current year's Rs 75,000 crore.

Construction could get a boost because it creates jobs, a senior official requesting anonymity said.

"The interim budget would contain measures for the housing sector,” he said.

Analysts did not rule out a cut in excise duty on cement and steel from its current levels of 10 per cent.

"Excise duties could be reduced on commercial vehicles and auto components while protection of the steel sector via import duties could be increased," the official said.

Tax rates may stay put.

"We do not expect any change to direct tax rates, but measures to simplify procedure and improve administration, such as centralised assessment of income tax returns, are likely," said Sonal Varma of Nomura Financial Advisory and Securities.