The government will repeal the urban land ceiling and regulation act to free the supply of urban land for housing construction.

Minister of financed announced that government would tackle the enormous housing shortage through partnership with housing finance institutions and private sector.

The budget allocation for Indira Awas Yojana was being increased to Rs 1,600 crore from Rs 1,144 crore in the revised estimate for 1997-98. The scope of the scheme was being widened to include a loan-cum-subsidy programme.The capital base of housing and urban development corporation (Hudco) was being increased by Rs 100 crore from the budget so that it would provide more leverage for housing construction funds.

Highways

Budget has provided Rs 500 crores for the National Highways Authority of India (Nahai) to catalyse new road projects including four-laning of existing national highways.

The minister raised the total plan outlay for the key infrastructure sectors,including of energy, transport and communications pegging the size at Rs.61,146 crore for the current year.

In a bid to accelerate the flow of direct foreign investments (FDI), Sinha reduced the time-limit for clearances from 180 to 90 days and initiated schemes to attract larger NRI savings.

He said government proposed to provide some flexibility by allowing upto 10 per cent of new accretion to provident fund to be invested in private sector securities which have an investment grade rating from at least two credit rating agencies.

Outlay increase

Plan outlay for the year 1998-99 for key infrastrucrure sectors has been increased by 35 per cent from Rs 45,252 crore to Rs 61,146 crore. Power, transport and communications have been identified as the key sectors which will see these investments. According to the budget recommendations, this steep increase in outlay will trigger industrial activity and revive rapid economic growth.

SEBs' dues

The outstanding dues from state electricityboard to major PSUs such as NTPC and Coal India amount to about Rs 10,000 crore. These large outstanding dues are serious impediments to investment by these PSUs. The government will evolve a guarantee scheme to cover such dues. On the strength of such guarantees, the PSUs concerned will be able to raise resources either by securitising these debts or directly entering the market for tapping resources. This would help these enterprises to raise resources to fund large projects in the power and coal sectors.

Bombay Dyeing, RIL to gain

Bombay Dyeing and Reliance Industries will be major beneficiaries due to customs duty cuts on paraxylene from 15 per cent to 5 per cent. Paraxylene is a major raw material for PTA and DMT and is largely imported by the two rival firms.

Baroda Rayon to benefit

Excise reduction on nylon filament yarn from 30 per cent to 25 per cent has come as a blessing in disguise for players like Baroda Rayon, the Gaekwads-controlled company which has been languishing undersevere liquidity crunch. Small firms manufacturing fishing nets will also benefit from the duty cut.

Petrochemicals woes

The petrochemicals industry has been neglected, with the budget failing to offer the much-expected surcharge on imports for all petrochemical products. The profitability of public sector IPCL, which was hit hard by large-scale dumping, is likely to remain under pressure due to dumping from South-East Asian countries.

Tata Tea, HLL not to be hit

Tata Tea and Hindustan Lever are not expected to be hit due to packaged tea being brought under the excise net, as prices of tea are coming down, feel analysts. Packaged tea will be subject to an excise duty of 8 per cent. As far as spices are concerned, it currently contributes to a small quantity to HLL's turnover.

Duty impact

The 8 per cent non-modvatable duty will have an impact on raw materials like industrial oils which is being imported by toilet soap manufacturers like Hindustan Lever and Godrej Soaps. Thisimpact is likely to be inflationery as manufacturers may chose to increase prices of their products following increase in input costs.