Infra & Rural Focus Will Generate Domestic Demand

The Union Budget 2016-17 touched the ground and its focus on rural India would go a long way to generate demand in the economy and give a push to overall growth and development of the country. The nine pillars of Union Budget viz. Agriculture, rural sector, health sector, education skills and job creation, infrastructure and investments, financial sector reforms, governance and ease of business, fiscal discipline, and tax reform to reduce compliance burden are inspiring and will not only fuel economic growth but increase India’s competitiveness.

The additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh will give a boost to the real estate sector. However, there should not be any cap on the price of house. It should be open-ended for the house buyers.

Allocation of over Rs. 87,000 crore for rural development is encouraging as it will increase farmers’ income in the coming times and fuel rural demand which is the need of the hour. Allocation of Rs. 38,500 crore for MGNREGA will facilitate employment generation in rural areas and will facilitate all-inclusive growth in the economy. Allocation of Rs 2.87 lakh crore to Gram Panchayats is highly appreciable as it will help in growth and development at the grassroots of villages. However, the supply side should also be focussed particularly availability of food items should be ensured as demand is going to increase in the rural segments in the coming times.

Focus on development of infrastructure through high allocation of Rs. 2,21,246 crore while capital expenditure of Rs. 2 lakh crore on railways and roads will lead to creation of state of the art infrastructure which is much needed for up scaling manufacturing growth and fuelling economic growth in the coming times. The medium term goal of the government to abolish permit-raj regime is inspiring as it will fasten clearances and facilitate ease of doing business. 100% FDI allowed in marketing of food produce manufactured and processed in India will give a boost to not only the Food Processing Industry but also Agriculture sector. It will give a push to Make in India initiative of the government.

Rural focus will generate domestic demand; focus on infrastructure to increase competitiveness: Dr Mahesh Gupta, President PHD Chamber

While applauding the Union Budget 2016-17 budget announcements, President, PHD Chamber, Dr. Mahesh Gupta said that Budget has touched the ground and its focus on rural India would go a long way to generate demand in the economy and give a push to overall growth and development of the country.

The nine pillars of Union Budget viz. Agriculture, rural sector, health sector, education skills and job creation, infrastructure and investments, financial sector reforms, governance and ease of business, fiscal discipline, and tax reform to reduce compliance burden are inspiring and will not only fuel economic growth but increase India’s competitveness, said Dr. Gupta.

We are happy that our suggestion to increase deduction on exemption for Income Tax on interest paid on Home Loans has been partly accepted as there is an additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh which will give a boost to the real estate sector, he said.

We suggest that there should not be any cap on the price of house. It should be open-ended for the house buyers, said Dr. Mahesh Gupta.

Stimulus to real estate sector would provide a significant fillip to the economy and enhance India’s GDP and so will be the level of enhanced revenue to the government and desired fiscal consolidation, said Dr Gupta.

Allocation of over Rs. 87,000 crore for rural development is encouraging as it will increase farmers’ income in the coming times and fuel rural demand which is the need of the hour, he said.

Allocation of Rs. 38,500 crore for MGNREGA will facilitate employment generation in rural areas and will facilitate all-inclusive growth in the economy, he added.

However, the supply side should also be focussed particularly availability of food items should be ensured as demand is going to increase in the rural segments in the coming times, said Dr. Mahesh Gupta.

Allocation of Rs 2.87 lakh crore to Gram Panchayats is highly appreciable as it will help in growth and development at the grassroots of villages, said Dr. Gupta.

Focus on development of infrastructure through high allocation of Rs. 2,21,246 crore while capital expenditure of Rs. 2 lakh crore on railways and roads will lead to creation of state of the art infrastructure which is much needed for upscaling manufacturing growth and fueling economic growth in the coming times, he said.

The medium term goal of the government to abolish permit-raj regime is inspiring as it will fasten clearances and facilitate ease of doing business, added Dr. Gupta.

100% FDI allowed in marketing of food produce manufactured and processed in India will give a boost to not only the Food Processing Industry but also Agriculture sector. It will give a push to Make in India initiative of the government, he said.

The government’s decision to retain fiscal deficit at 3.9% in 2015-16 and target of 3.5% in 2016-17 despite burden due to 7^th Pay Commission, shows government’s commitment to maintain fiscal prudence, said Dr. Mahesh Gupta.

The budget focuses on socio-economic development as Rs. 1700 crore has been allocated for 1500 multi-skill development centres while 62 new navodaya vidyalayas to provide quality education, he said.

Also the additional healthcare cover of Rs 30,000 for senior citizens is a step in the right direction, he said.

Though no changes have been made in income tax slabs, the increase in deduction for rent paid to Rs. 60,000 from Rs. 20,000 will benefit the households, said Dr. Gupta.

The allocation of Rs. 25,000 crore towards recapitalization of Public Sector Banks is inspiring. However, the current state of banks desires more allocation of funds, he added.

The Price Stabilization Fund set up with a corpus of Rs. 900 crore is inspiring as it will help to maintain stable prices of pulses which have been a cause of worry in the recent times, he said.

The increase the turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act to Rs. 2 crores is highly appreciable as it will bring big relief to a large number of assessees in the MSME category, said Dr. Gupta.

Economic Survey envisages promising growth outlook; ease of doing business: PHD Chamber

Dr Mahesh Gupta, President, PHDCCI

While appreciating the robust performance of Indian economy, Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry said in a press statement issued here today that despite the global headwinds, economy holds immense growth potential to grow more than 8% in the next couple of years.

We are proud that India is becoming the fastest growing major economy in the world. Government’s commitment to carry the reform process forward is highly encouraging and indicate that the double digit growth trajectory is not far away, said Dr. Gupta.

Economy is making great achievement in ease of doing business vis-a-vis removing barriers to entry for businesses, he added.

However, lot needs to be done in the ease of doing business as the economy is moving from socialism to marketism without exit policy. Creating a more captive environment would be critical to address the exit problem which affects the performance of businesses and economy, said Dr. Gupta.

We appreciate achievements in the power sector in last two years; record generation capacity with reforms in discoms and developments in renewable energy are really appreciable.

We believe time is most opportune to allow industries with higher power demands to absorb excess generation capacity through open access to strengthen Make in India programme.  

We believe agriculture sector needs a greater transformation to improve livelihoods of the farmers and to achieve food security, said Dr. Mahesh Gupta

Raising productivity in agriculture by investing in efficient irrigation technologies and efficient use of inputs would be critical to improve the state of farm sector, he said.

There is urgent need to rationalize agricultural policies including subsidies by making them ‘input-crop and region-neutral’ to improve productivity in agriculture.

Water productivity needs to be enhanced through tapping harvesting and recycling water, efficient on farm management practices, micro irrigation, use of waste water and resource conservation technologies, added Dr. Gupta.

We appreciate the performance of social sector schemes of the government particularly the women empowerment.

We are pleased to know that women account for 57% of employment given under MGNREGA in the current financial year.

There is a need to increase investments in health and education of people to exploit India’s demographic dividend to optimal level, added Dr. Gupta.

We believe supply side factors for the Indian economy are very crucial, so the focus must be on timely and uninterrupted supply.

It is worrying that India has the second highest number of undernourished people. We have to have a greater focus on this problem to build a healthy and strengthened India, added Dr. Gupta

We appreciate government’s efforts in controlling inflation.

Astute policies and management of inflation by the government through buffer stocking, timely release of cereals and import of pulses had helped in keeping prices of essential commodities under check during 2015-16, said Dr. Mahesh Gupta

It is inspiring to know that India is increasingly becoming strong in the production of perishables and protein contain food items.

India ranks first in milk production and accounts for 18.5% of world production. The per capita availability of milk in India has increased from 176 grams per day in 1990-91 to 322 grams per day by 2014-15. 

Overall, state of the Indian economy is inspiring and we look forward to a dynamic budget announcement to pave way for strong and sustainable growth environment with a greater ease of doing business, said Dr. Mahesh Gupta.

RAILWAY BUDGET 2016-2017 Expendit; New Source Of Revenue, New Norms & New Structures Appreciable

PHD Chamber has described the Railway Budget 2016-17 as an expedient budget which has a well-defined strategy and stresses on modernization, employment generation, freight movement, socio-economic welfare and private participation.

The employment focus of the budget is highly encouraging as Railways shall generate 23 crore many days by 2018-19 of which 9 crore man-days are envisaged in FY17-18 and 14 crore  in FY18-19. The formulation of three pillars of strategy viz. new sources of revenues, new norms and new structures shows the government’s commitment towards modernization and expansion of the system. Allocation of 8.5 lakh crore to be spent on modernization of railways in the next 5 years is highly appreciable. Introduction of very modern train systems called train sets, up lifts and escalators at major stations, preparation of 5-year corporate safety plan, modern track structures, paperless working in material management is highly encouraging as these will provide state of the art infrastructure to the people. These along with digitized mapping of land records of railways, introduction of SMART Coaches and on-board services such as entertainment, local cuisines, Wi-Fi etc will facilitate modernization of the Railways in the coming times.

No hike in Railway Passenger Fares is good as the economy was facing severe inflation during the last many years and will be good respite to the common man. The creation of Joint Ventures with State Governments for undertaking rail based projects is a historic decision and will open up new avenues for sharing the ownership of Railways, enhance management bandwidth for project execution, strengthen the spirit of cooperative federalism and enable States to jointly decide their priorities for development of backward regions. The announcement of 44 new projects and setting up of 2 locomotive factories under the Make in India initiative of the government is inspiring as these initiatives will attract more investments in the economy.

The announcement of three new train services- Humsafar, Tejas and UDAY for the reserved passengers will add to the glory of the Indian Railways in the coming times. The rail budget rightly focuses on socio-economic upliftment of masses as the introduction of Antyodya Express and addition of coaches in Deen Dayalu for unreserved travel rightly asserts it. The expansion of Vikalp Scheme to provide choice of accommodation in specific trains to wait-listed passengers and measures to improve the cleanliness on stations and trains show government’s commitment towards welfare of passengers. The expansion of freight basket, tariff rationalization for the freight and building terminal capacity will ensure timely supply of goods and services in the economy. Bringing in broad-gauge network in certain North-eastern states will help in improving their connectivity in the country, thus leading to growth of services sectors such as tourism in these states. The Rail Budget focuses on women safety as the budget proposes reserved middle bays in coaches along with all India helpline numbers and CCTV surveillance at 311 stations.

Snapshot of Railway Budget 2016-17

Budget Estimates  

Gross Traffic Receipts	Rs 1,84,820 crore
Passenger earnings	51,012 crore
Freight traffic	50 million tonnes
Goods earnings	Rs. 1, 17,933 crore.
Other coaching sundries	Rs. 6,185 crore Rs. 9,590 crore
Ordinary Working Expenses	Rs. 1,23,560 crore
Pension outgo	Rs 45,500 crore
Plan Size for 2016-17	Rs. 1,21,000 crore
Operating Ratio	92%

Source: PHD Research Bureau compiled from Railway Budget 2016-17,  

Ministry of Railways, Government of India

Major announcements

Quality Services- Wi-Fi Service at 100 Stations is to be commissioned this year and at 400 more stations in the next 2 Years. Track Management System (TMS) will be implemented on entire Indian Railways. For safety purposes, all India 24/7 helpline number 182 has been introduced and CCTV surveillance would be provided at 311 stations. In pursuance of the objectives of Accessible India Campaign, Indian Railway will ensure that all stations under redevelopment are made disabled friendly. 17000 Bio-Toilets in Trains under Swachh Rail Swachh Bharat Mission will be set up across stations. Quota of lower berths for senior citizens and women will be increased with middle bays reserved in coaches for women. 

Vision2020- By 2020, Indian Railways look forward to meet the demands of the common man such as reserved accommodation on trains being available on demand, time tabled freight trains with credible service commitments, high end technology to significantly improve safety record, elimination of all unmanned level crossings, punctuality increased to almost 95%, increased average speed of freight trains to 50 kmph and Mail/Express trains to 80 kmph, semi high speed trains running along the golden quadrilateral and zero direct discharge of human waste.

Station Redevelopment and better connectivity to areas with difficult terrain- Multilateral Financial Investment Partnership with State Governments for redevelopment of stations have been proposed. Indian Railways have opened the Broad Gauge Lumding-Silchar section in Assam. It also brought Agartala, the capital of Tripura on to the Broad Gauge network. In J&K, work on Katra-Banihal section of Udhampur-Srinagar-Baramulla Rail Link Project is progressing satisfactorily. It is proposed to take up the new freight corridors in areas of North-South connecting Delhi to Chennai, East-West connecting Kharagpur to Mumbai & East Coast connecting Kharagpur to Vijayawada through innovative financing mechanisms including PPP.  

New trains facilities- New trains namely Humsafar, Tejas and Uday Train Services are proposed to be introduced for the reserved passenger. Antyodaya Express is proposed to be introduced over long-distance, fully unreserved, superfast train service, for the common man. Two to four Deen Dayalu coaches will be added in some long distance trains for unreserved travel to enhance the carrying capacity.

Railways to increase revenue through non-fare sources- The current revenue through non-fare sources is less than 5% and it will be increased to world average of 10% by next five years. For this purpose, monetizing land along tracks, monetizing soft assets, advertising and overhauling of Parcel business would be put in place.  Railways would focus to increase productivity and better manufacturing practices. It is aimed to generate annualized revenues of about Rs.4,000 crore by 2020.

Railway Planning & Investment Organisation- Indian Railway intend to set up a Railway Planning & Investment Organisation for drafting medium (5 years) and long (10 years) term corporate plans. Bids Finalized for setting up two Loco Factories under ‘Make in India’ initiative. Under ‘Make in India’, the Indian Railways was able to finalise the bids for setting up two loco factories with an order book of about Rs. 40,000 crore. The ‘Vikalp’ (Alternative Train Accommodation System) scheme introduced in October 2015 will be expanded to provide choice of accommodation in specific trains to wait-listed passengers. Railway proposes to set up ‘SRESTHA’- A R&D Organization Bringing Most of IR Companies Under an Umbrella of a Holding Company.

Railway Budget 2016-17 pragmatic; new sources of revenues, new norms and new structures appreciable: PHD Chamber

President PHD Chamber of Commerce and Industry, Dr. Mahesh Gupta, has described the Railway Budget 2016-17  a pragmatic one which has well-defined strategies and stresses on modernization, employment generation, freight movement, socio-economic welfare and private participation.

“The employment focus of the budget is highly encouraging as Railways shall generate 23 crore many days by 2018-19 of which 9 crore man-days are envisaged in FY17-18 and 14 crore  in FY18-19”, said Dr. Mahesh Gupta.

The formulation of three pillars of strategies viz. new sources of revenues, new norms and new structures shows the government’s commitment towards modernization and expansion of the system, said Dr, Mahesh Gupta.

Allocation of 8.5 lakh crore to be spent on modernization of railways in the next 5 years is highly appreciable, said Dr. Gupta. Introduction of very modern train systems called train sets is highly encouraging as these will provide state of the art infrastructure to the people, he added.

Further, plans to set up lifts and escalators at major stations, preparation of 5-year corporate safety plan, modern track structures, paperless working in material management are encouraging.

These along with digitized mapping of land records of railways, introduction of SMART Coaches and on-board services such as entertainment, local cuisines, Wi-Fi etc will facilitate modernization of the Railways in the coming times, said Dr. Gupta.

Dr. Gupta appreciated Rail Minister’s remarks and re-asserted that every rupee of investment in Railways has the capacity to increase economy-wide output by Rs. 5. The increased investment in Railways will contribute to further economic growth of the country, said Dr. Gupta.

No hike in Railway Passenger Fares is good as the economy was facing severe inflation during the last many years and will be good respite to the common man, added Dr. Mahesh Gupta.

The creation of Joint Ventures with State Governments for undertaking rail based projects is a historic decision and will open up new avenues for sharing the ownership of Railways, enhance management bandwidth for project execution, strengthen the spirit of cooperative federalism and enable States to jointly decide their priorities for development of backward regions, he said.

The announcement of 44 new projects and setting up of 2 locomotive factories under the Make in India initiative of the government is inspiring as these initiatives will attract more investments in the economy, he said.

The redevelopment of 400 stations through PPP will spur private investments in the economy which is the need of the hour, said. Dr. Gupta.

The announcement of three new train services- Humsafar, Tejas and UDAY for the reserved passengers will add to the glory of the Indian Railways in the coming times, said Dr. Mahesh Gupta.

The rail budget 2016-17 rightly focuses on socio-economic upliftment of masses as the introduction of Antyodya Express and addition of coaches in Deen Dayalu for unreserved travel rightly asserts it, he said.

The expansion of Vikalp Scheme to provide choice of accommodation in specific trains to wait-listed passengers and measures to improve the cleanliness on stations and trains show government’s commitment towards welfare of passengers, said Dr. Gupta.

The expansion of freight basket, tariff rationalization for the freight and building terminal capacity will ensure timely supply of goods and services in the economy, said Dr. Mahesh Gupta. The expansion of connectivity to ports would also facilitate ease of doing business as better connectivity to ports connectivity is a major issue faced by businesses and exporters, he added.

 North-East by bringing in broad-gauge network in certain North-eastern states will help in improving their connectivity in the country, thus leading to growth of services sectors such as tourism in these states, he said.

The Rail Budget focuses on women safety as the budget proposes reserved middle bays in coaches along with all India helpline numbers and CCTV surveillance at 311 stations, said Dr, Mahesh Gupta.

Northern States to face Rs.34,000 crore loss of Economic Activity due to Jat Stir, PHD Chamber of Commerce and Industry

While apprehending about the risks to fresh investment activities in the region, Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry said there is a huge loss of the economic activity not only in the state of Haryana but across the Northern States of India.

As supply of the essential items has been severely impacted, we cannot rule out the impact on inflation, added Dr. Mahesh Gupta.

Based on inputs received from various industry stakeholders across the states, we estimate that these states may face Rs. 34,000 crore loss of economic activity due to Jat agitation during the last few days, said Dr. Mahesh Gupta.

Disruption in overall transportation activities including railways, roads, passenger vehicles, goods vehicles, drop down in tourists arrivals, loss in financial services, hit to the industrial sector including manufacturing, electricity, and construction; the overall activity has choked and may result in a huge loss in the GSDP of states for the last quarter of FY15-16, said Dr. Mahesh Gupta.

Loss of Economic Activity so far

S. No.	Economy and Industrial Ingredients	Economic Impact (Rs. Crore)
1.	Loss to the services activities including tourism services, transportation services majorly rails and roadways and financial services.	18,000
2.	Loss to the industrial and agri business activities including manufacturing, electricity, construction activities, damage to food articles.	12,000
3.	Damage to infrastructure including damage to roads, restaurants, bus stands, railway stations, among others	4,000
	Total loss of Economic Activity	34,000

Source: PHD Research Bureau

Note: Anticipated loss has been calculated for the northern states including Haryana, Punjab, Delhi, Chandigarh, Rajasthan, Uttarakhand, Uttar Pradesh, Jammu and Kashmir and Himachal Pradesh

All the northern states of India including Haryana, Punjab, Delhi, Chandigarh, Rajasthan, Uttarakhand, Uttar Pradesh, Jammu and Kashmir and Himachal Pradesh contribute at around 32% in India’s GSDP.

Since about 550 trains have been dismissed due to agitation and also flow of tourists and passengers movements have been impacted, the contagion effect can further have impact on economies of the states other than the Northern States of India.

We believe that the northern states would take measures for the smooth functioning of the economic activity and would restore the essential services in their respective territories, said Dr. Mahesh Gupta.