The Union Budget 2003-04 presented by the Hon’ble Finance Minister will result in a marginal increase in cost of construction due to increase in cement price, service tax, diesel price etc. A quick estimate done by CIDC indicates that this increase will be in the range of 0.3%.

However, a number of initiatives have been proposed in the form of starting new projects which will have a substantial positive impact on the growth of construction activities:

• India to be promoted as global health destination

• Pvt airports to be set up in Bangalore, Hyderabad, Mumbai and Delhi

• Rs 8,000 cr for Rail Vikas Yojana

• 48 new road projects at Rs 40,000 cr

• Development of sports infrastructure under public - pvt sector initiatives

• Allocation for FY - 03-04 to concentrate on infrastructure development

The Budget is excellent for the Construction Industry as it will generate massive employment opportunities and demand for construction goods. The Construction Industry has to gear itself up and enhance its capacity substantially for the new opportunities. The increase in cost of construction as mentioned above is likely to be offset in view of more work. The reduction of freight for certain commodities, as announced in Railway Budget 2003-04, such as petrol, fuels like LPG, CNG, crude oil etc., steel, pig iron and cement will have a further positive effect on the Construction Industry.

Both Union Budget and Railway Budget are consumer friendly and would encourage consumer spending in the Construction Industry, particularly in the buildings and maintenance sectors.