Budget neglects the sad plight of construction firms

Annual Budgets for the nation, are expected, not only to put up the plans for generating revenue and the expenditure, but also inter-alia reveal the direction the economy is headed for.

Merely making grand announcements of proposed expenditure or investment in building the physical infrastructure has been a ritual for past several years and has again been repeated. Announcements about higher financial allocations for roads and highways sector, establishing ‘Smart cities’, only amount to this. In fact, the numbers keep rising every successive year to give a feeling of well being to everyone and earn appreciation of a handful of so- called industry captains, but what about the delivery?

Only fancy figures

So once again, the government buttressed with such fancy figures has indeed forgotten the reality staring in our faces, and repeated the act of making a Budget which does not show the appreciation  of a grave situation confronting us.

Utter neglect of the sad plight of construction companies, and other constituents of construction industry has now brought us to a situation, where we shall soon be bidding good bye to almost 90% corporates in coming years, with severe stress on economy and severe stress on banking institutes. Once again, my opinion about economists is reconfirmed. They can prove anything, even if it defies all logic!

Many have started doubting openly about the claims being made about the growth of economy, which our economists continue to peg at 7 to 7.5%.

If one really looks at the health of the banks and the financial institutions, state of consistently falling consumption of cement, steel, other mineral products, and the ever-rising unemployment levels both at grassroot level, as well as the mid income group citizens, and to top it all, the falling agricultural production, one indeed wonders if such assessment is well placed.

The Budget 2016 does not show a direction, nor prescribes the policy measures the government intends to take to combat the impediments defined earlier. How would the construction companies be strengthened, how would the ever rising non-performing assets (NPAs) could be tackled and how the infrastructure business disputes, which remain unresolved, would be resolved to help both the lenders and borrowers, are a few questions that the Budget does not answer.

Questions unansweredThis would leave us with a few more questions, if such policy initiatives are not crystalised.

 Who shall construct those highways, roads, airports, and the rest of physical infrastructure?

 Who shall employ those four crore citizens who are employed and are fast losing their employment because their employers are no more capable of paying their salaries and wages?

 What shall be the social repercussions of this mighty force rendered idle and forced to resort to repugnant measures to sustain their survival?

 What shall happen to those grand programmes like Skill India, when the trained youth will not find employment because there would be no one to employ them?

 What would happen to the banks whichwould be left with bad debts, lot of junk, and no one to pay  back the debts, not to talk of no borrowers and all serviceable deposits?

 And, what would happen to huge tax revenue the government needs to support their grand programmes and to other segments of manufacturing industry which exists and survives because the construction industry has been alive.

The Budget 2016 needs a serious relook!

(The author is the Director Generalof Construction IndustryDevelopment Council, New Delhi)