With the Union Budget 2017-18 scheduled to be presented on February 1, 2017, the cash-starved realty sector is expecting it to be a budget that brings the boom back.
After Prime Minister Narendra Modi announced demonetisation of Rs 500 and Rs 1000 notes on November 8 last year, the real estate sector has faced a downward shift
It is being believed that Finance Minister Arun Jaitley would announce some kind of sops for the sector to boost growth and subsequently create demand for more housing and office spaces,as the sector has contributed significantly towards Gross Domestic Product (GDP) and employment generation.
In the last couple of months, the government has been proactive in terms of providing relief to this sector, its stakeholders and the buyers.
Passage of Real Estate Regulation Act (RERA), Goods and Services Tax (GST) and the relief provided by several banks on interest rates has provided much needed fuel to the realty sector.The affordable housing incentives announced by the Prime Minister on the New Year Eve of 2017 has given a new hope to the sector.
The realty sector is of the view that the government would announce some sorts of exemptions in tax slabs which might help the consumers to fuel their purchasing power and further, maintain the flow of money in the economy.
Commenting on the sector's expectations from the Finance minister Avneesh Sood, Director, Eros Group said, "Government has already been very active for the realty sector since the Union Budget announcement for 2016-17. Major incentives for both, developers and buyers were announced under affordable housing initiatives and rental housing. Very recently we even observed rate cuts by banks for the housing segment in general, where affordable category received even bigger boosts by the government. This time we are predicting the government to ease the taxation slabs and provide higher spending power to the consumers that will indirectly benefit the economy and the realty sector."
Infrastructure will be a crucial side where the government might announce big projects and greater spending. This in return will allow the conversion of rural to urban regions, thereby promoting tier 2-3 cities to gain real estate momentum and increase job opportunities, he added.
Meanwhile another builder is expecting a status of "Industry" for realty sector.
Deepak Kapoor, President CREDAI-Western UP said, "Housing for all and Affordable Housing have been the two major jargons of the government for the real estate sector, where work has been carried out diligently. Industry status for the realty sector has been long awaited and it would be a game changer for the sector if it is granted this time."
At present, only the EWS and LIG segments have access to the PMAY benefits, and still there is a large segment of youth population which is in dire need of a home at low cost, but don't fall under such categories. This Budget must focus upon providing such benefit to the masses and provide clarity over projects been covered under this scheme, Mr Kapoor added.
Ashok Gupta, CMD, Ajnara India Ltd said, "GST's proper implementation, relief on income tax, more incentives for digital means of transacting and promoting REITs and InvITs might be amongst the highlights from the upcoming Budget. No direct benefits for the sector are expected at this time, as recent rate cuts and affordable housing incentives have already been announced by the government. We might only witness the Budget providing indirect benefits to this sector that will act as a catalyst in the long run."
However, few of realty majors want reduction in input costs to scale growth in the long run.
Dhiraj Jain, Director, Mahagun Group said, "This Union Budget, policies for allied industries such as steel and cement needs to be standardised as it indirectly affects the cost of housing units. Also, tax deduction limit for housing loans of Rs two lakh is quite less especially for major Tier one cities where ticket sizes cross one crore in several cases. This limit can be looked upon along with reduction in stamp duty charges to allow higher savings."
Ashwani Prakash, Executive Director, Paramount Group said, "Although, single window clearance and industry status is an urgent need of this sector in order to provide the much needed impetus on a larger scale. With RERA and GST to become operational this year, it is imperative that single window clearance is announced across the country."
Vikas Bhasin, MD, Saya Group added, "For the real estate sector, government is already moving on the right track with timely announcements and policy implementations taking place at a decent pace. Post demonetisation and with the banks reducing lending rates, the government is leaving no stones unturned to achieve its target of Housing for all by 2022. It is important though to reach out to all the possible audience segments and not only the weaker sections of the society." —UNI