Exemption to prefab concrete products welcomed

Exemption to prefab concrete products welcomed
The Hindu Business Line, July 8, 2009, Page 2

R. Balaji, Chennai

The housing and construction industry has welcomed the Budget proposals that envisage a fillip to urban and rural housing, and tax exemption for prefabricated concrete products manufactured at site.

Mr R. Sarabeswar, Chairman and Chief Executive Officer, Consolidated Construction Consortium Ltd, said the full exemption to prefabricated concrete products would give a 12 per cent relief in cost.

Tax relief

This tax relief has been a long-pending demand from construction companies and is a welcome step that complements the Government’s plans to increase spending and investments in infrastructure. Concrete structures such as bridge beams, slabs and blocks would be covered under this exemption.

The Budget announcements also hold significant points that will drive infrastructure development, construction and housing. This includes 23 per cent higher allocation to highway projects, plan to construct one lakh houses for the para-military forces and the huge scheme announced to increase supply of rural housing and urban housing targeted at creating slum-free cities.

Increased allocation to IITs and other academic institutions would also drive construction of new academic buildings, he said.

The proposal to provide for a larger role for India Infrastructure Finance Company Ltd in infrastructure financing is a welcome step, he said. This would encourage public-private partnership in infrastructure financing and encourage flow of bank credit to PPP projects, Mr Sarabeswar said.

However, the proposal to expand the National Rural Employment Guarantee Scheme is a retrograde step in the long term. It would have an adverse impact on creation of a skilled and employable labour force.

The proposal to allocate Rs 39,000 crore to the scheme with a target of daily wage of Rs 100 will only encourage unproductive labour.

The money could be better spent on creating large-scale training infrastructure, Mr Sarabeswar said.