Budget impact on housing and construction sector: PwC view

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For the financial year 2008-09, overall gross domestic product (GDP) growth rate of India was 6.7% whereas fiscal deficit was 6.2%. The construction sector as a whole grew at 7.2% during the financial year 2008-09 as compared to 10.1 % during financial year 2007-08. However, the economic survey suggests that worst is behind us and the sector is likely to improve in financial year 2009-10. Despite the slowdown, the Indian construction industry is expected to attract 42% of total investment in infrastructure proposed of around USD 500 billion in period 2007-2012.

Here's a quick snapshot

Policy Initiatives

Infrastructure Financing

- Indian Infrastructure Finance Corporation Limited (IIFCL) will evolve a takeout financing scheme which will facilitate incremental lending to infrastructure sector.

- IIFCL will refinance 60% of commercial bank loans for PPP projects in critical sectors over next 15 to 18 months.

Impetus for Rural Housing

- Allocation for Indira Awaas Yojana increased by 63 % to Rs 88,000 million.

- A sum of Rs 20,000 million allocated to Rural Housing Fund, which will boost the resource base of National Housing Bank for their refinance operations in rural housing sector.

 

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