Chairman & Managing Director of MARG Group, GRK Reddy, has described the Union Budget 2012-13 as a mixed bag. For Infrastructure and real estate sectors, the Union Budget throws up a mixed bag in terms of positive measures and disappointments. However, amidst a backdrop of rising inflation, tight liquidity, high interest rates, industrial slowdown, delayed reforms and a negative market sentiment, the budget at best can be described as 'realistic' and to a large extent 'growth oriented', he said in a statement.

Welcoming the measures announced by the Finance Minister to boost investment in the infrastructure sector, Mr Reddy said the measures would propel the economy to a healthy growth trajectory in the coming years. He, however, described the delay in implementation of the Direct Tax Code (DTC) and the continuing lack of clarity with respect to SEZs is a big disappointment.

Further, Mr Reddy said interventions such as awarding infrastructure status to realty; access to ECBs (except for affordable housing) would have significantly benefited the industry by reducing capital costs. Interventions such as increase in income tax exemption on principal & interest would have boosted demand. Instead, the increase in service tax by 2% along with the prevailing high interest rates will further negatively impact demand.

Only silver lining is the extension of 1% interest rate subvention loans upto Rs. 15 lakh for housing projects up to Rs.25 lakh by 1 more year and ECBs for affordable housing. However, it would have had more impact if a broader price bracket was covered, he added.