Finance Minister Nirmala Sitharaman’s stimulus measures will provide a spur to economic activity, especially across the construction and infrastructure sector. The newly-announced measures such as replacing EMD with bid security declaration will provide relief to contractors since it shall lower locked-up capital and reduce cost of bank guarantee, Vinayak Deshpande, managing director, Tata Projects Ltd has said.

“The new production-linked incentive scheme for ten key sectors will lead to enhanced manufacturing activity in India, thereby augmenting the need for the creation of new and expanded manufacturing facilities. With Rs 18,000 crore to be provided over and above the budget announcement to help 1.2 million houses be grounded and 1.8 million houses are completed – it will provide an impetus to the construction sector and allied industries involved in construction materials,” he added.

According to Deshpande, the Rs 6,000 crore equity infusion to be done in the NIIF debt platform for funding infrastructure is another “positive” step. “Additionally, the earnest money deposit and performance security on government tenders have been reduced to 3% instead of 5% to 10% earlier which is a positive move for the entire construction and infra sectors.”