In spite of the recent Swachh Bharat Mission achievement figures, the fact remains that India tops the global list of Open Defecation with 58% of the entire population practising the same, an issue which the government is committed to eradicate by 2019. To make the mission economically sustainable, the government has also imposed 0.5% Swachh Bharat Cess to the existing service tax. Last year, while cleaning & hygiene industry managed to capture the government and common man’s attention, expectations were sky high when the Finance Minister Arun Jaitley announced the budget this year. Clean India Journal analyses…
A day before the general budget 2016, PM Narendra Modi set the agenda of budget by announcing agriculture to be at the centre in his address in ‘Mann ki Baat’. There is huge allocation for infrastructure and a 0.5% Krishi Kalyan cess to the existing service tax of 14.5%.
Coming to the cleaning & hygiene, out of planned expenditure of `5.5 trillion, Jaitley has announced `9000cr for Swachh Bharat Mission. The sector yet again missed the focus and is somewhere at the epicycle of the budget.
” We all agree, steps must be taken to support the agricultural sector, once a booming industry, now a bane for farmers. Ironically, the cleaning and hygiene sector, which is aggressively engaged in reaching cleaning solutions to the nooks and corners of India, has been slapped with all kinds of cess – infrastructure, education, clean environment, Krishi Kalyan and Swachch Bharat!
The cleaning & hygiene sector and associated service industry, which provides training and employment to the needy and less privileged sections of the society, has been left without any support or tax exemption. In fact, the government, as done with certain sectors, should not only take back the Cess levied on cleaning products and services but must also provide tax exemptions over loans sought for cleaning businesses. If India has to become clean… if Swachch Bharat Abhiyan has to succeed, the cleaning sector has to take the lead. And this is possible only with essential government provisions.”
Real Estate & Infrastructure to drive cleaning
Amidst the global slow down, Real Estate has been badly affected and taking a note, certain measures have been taken that are poised to boost the growth. These are: increase in HRA deduction, removal of Dividend Distribution Tax (DDT) from Real Estate Investment Trusts (REITs) and boost to affordable housing by allowing 100% deduction on profits made by entities constructing them. With home cleaning and institutional cleaning becoming a good prospect for the cleaning & hygiene industry, the real estate measures will help upkeep the industry. Anuj Puri, Chairman & Country Head at JLL India said, “We expect a few listings to happen in the current year itself, either by financial institutions or developers. Currently, around 229 million sqft of office space can be seen as REIT-compliant. If we assume that even 50% of these get listed, we are looking at a total REITs listing worth USD 18.5 bn.”
Besides RE, Infrastructure gets a big boost from the budget. Total outlay for infrastructure in Budget 2016 stands at `2,21,246cr. `97,000cr has been provided for roadways. The plan is to construct 10,000km of national highways, clearly another window for road sweepers. Further, “The Budget has outlined revival plans for non-functional airports in partnership with state governments, with a vision to spend around `100-150cr on each airport to make them functional again. This will give a boost to infrastructure in many tier-II and tier-III cities, and is without a doubt positive for their real estate markets. A select few projects that are commercially viable with good ridership could pick up pace in the near term.”