Growth, in challenging times

The recently presented State Budget promises to bring buoyancy to the residential market, improve connectivity, and promote industrial townships. By Shrinivas Rao

The State Budget for 2020-21 has been the cynosure of all eyes, given the current state of affairs in the economy following the COVID-19 crisis. There were conjectures on how the government planned to provide relief in such challenging times. The Union Budget had given fair consideration to Karnataka during this fiscal, announcing the inclusion of several major cities of the State as beneficiaries of the Jal Jeevan Mission (Urban) as well as being identified for the AMRUT project. The Union Budget’s biggest benefaction was the augmentation of urban mobility in Karnataka, with funding announced for Bengaluru Metro Phase 2A and 2B projects and appending the Bengaluru-Chennai Expressway under the flagship projects schemes.

These allocations notwithstanding, there were several unfulfilled demands from various quarters that were eventually passed on to the State Budget. Presenting the Budget in the Assembly on March 8, the Chief Minister emphasised several key sectors while refraining from increasing tax rates or levying new taxes. Bengaluru garnered significant attention with ₹7,795 crore allocated for comprehensive development of the city. Approximately ₹850 crore was budgeted for the suburban rail project while ensuring that the doubling of Yeshwanthpur-Channasandra and Baiyappanahalli-Hosur lines would be completed by 2023.

The Budget also proposed the Bengaluru Signature Business Park to be constructed next to Kempegowda International Airport by KSIIDC. The project was kept in suspension for a prolonged period owing to subdued investor sentiment following the 2008 recession.

Additionally, the State will float a Swiss Challenge method tender to take up Peripheral Ring Road work around Bengaluru. A 41-km long Namma Metro line will be made operational in stages between June 2021 and December 2022, while the total metro network including 51 stations will be ready by August 2021 to accept ‘One Nation, One Card’, which can be used in both Namma Metro and BMTC.

Foot overbridges would be constructed at key locations to provide connectivity to the upcoming metro stations. Construction of a 100-acre theme park in Hessaraghatta has also been proposed. Further, to boost the economy and bring buoyancy to the residential market, the government has reduced stamp duty for the registration of apartments costing ₹35-45 lakh to 3% from 5%. The previous budget had already reduced stamp duty on new units costing less than ₹20 lakh to 2% from 5% while for properties costing ₹21-35 lakh, the rate was reduced to 3% in May to boost the struggling realty sector during the COVID-19 crisis. This development would expectedly provide impetus to the affordable housing sector. Meanwhile, the Budget also announced the implementation of a property registration pilot project using blockchain at ₹1 crore to prevent fraud and document tampering. A unified land management system would also be developed soon, with a cybersecurity policy and data centre policy on the anvil as well.

Huge investment

The State Budget also announced the development of Chief Minister Mega Integrated Industrial Townships in the Bengaluru-Mumbai and Bengaluru-Chennai industrial corridor on a minimum of 500-acre land, with investment of around ₹10,000 crore expected to be allocated to the townships in three years. In addition, an industrial township at Peenya would come up at ₹100 crore. A new slab for property tax has also been proposed for industries in urban areas.

In a significant move, around 150 government Industrial Training Institutes would be upgraded at ₹4,636 crore to create skilled human resources, thereby enhancing the talent pool in the State. The State will also establish a Venture Capital Fund of ₹100 crore wherein it will provide 25% of the fund.

Besides these, the Budget allocated substantial amounts to a host of other sectors, continuing to focus on strengthening welfare and inclusive growth, rural economy, and agriculture. Implemented effectively, the measures announced have the potential to lead the economy out of the pandemic-induced adversities and regain its lost momentum.

(The author is CEO-APAC, Vestian Global Workplace Services)

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