What are the three things you wish for from the Budget?
Anuj Puri (Abhijit Bhatlekar / Mint)
I think corporate tax and personal income-tax should be lowered. It should be reduced to 25% for both. It is currently at 30%. Secondly, there should be a stricter intellectual property rights regime in India. People are hesitant to do business in India because of this. The Budget should focus more on health care and education.
If you could end one thing, what would that be?
Licence raj. We still are reminiscent of the British Raj. I think there should be more transparency in income-tax in the real estate industry. There is not much transparency in the real estate, banking, telecom and aviation sectors.
If you were finance minister, what would be the one thing outside your industry you would want in the Budget?
Infrastructure. It is the first thing that comes to my mind. In fact, it is somewhat related to my industry. The end-user price of homes is so high because of the high land prices. Land prices are 70% of the total cost of homes. If I can bring it down to 20%, home prices will come down. But for that we need infrastructure. The moment infrastructure is in place, large parcels of land will open up. The restriction in supply of land is because of lack of infrastructure. We don’t have roads, we don’t have bridges. There is no reason for the value of land in Mumbai to be twice of that in New York. The problem is we don’t have infrastructure to decongest the city. From a business point of view, it is a big dampener. It is (lack of infrastructure) impacting the profitability of the gross domestic product of the country.
I would want public-private partnership in infrastructure. There should be more speed in allocation of contracts. The government should bring in innovative models to improve infrastructure.
What is the one thing you don’t want changed?
One interesting thing that I don’t want to be changed in the budget is the government’s approach to foreign direct investment (FDI)—the way it is opening up FDI in sectors. I get so much comfort when I see that the subprime crisis is not going to affect India. Opening up FDI surely and safely is the right way to go. We took a small step in real estate, retail and insurance. We wanted to assimilate and see how it impacts the sectors. We have still not gone ahead with opening up of legal fraternity and to an extent the media sector. There would have been nervousness had the subprime crisis hit India. We would not have been able to handle it.
Which budget disappointed you the most? Why?
I think it is going to be this year’s Budget. It is likely to be an election Budget. We are not going to see any new initiatives. But if you look at the past budgets, I was disappointed when the government came to power four years back. There were a lot of expectations from the finance minister, P. Chidambaram. But...the government got elected in October-November, so they did not have enough time for the budget. It was also a confusing budget because of the banking cash transaction tax and other things.
One proposal you think is shot down in every budget, but shouldn’t be.
A hike in FDI in insurance from 26% to 74%. I think it should not be shot down because a huge amount of capital is required for the insurance sector. It is a large cash outflow business. Because of the current level of FDI in the sector, a lot of burden is on the Indian insurance partner...
What would you consider to be inclusive growth?
Inclusive growth should take along India II and India III. India II are the office boys, drivers, and India III is the guy on the street who does not have a job in office. We have to make sure that education, health and aspirational needs of these people are met.
(Anuj Puri is chairman and country head of real estate consultant Jones Lang LaSalle Meghraj.)
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