Union Budget 2021-22 has reassured the country that the government will take all necessary steps for a post-pandemic economic revival, and lay a path towards the realisation of making India a $5 trillion economy by 2024.
Welcoming the Budget, Satish Magar, President CREDAI National said, “Increased allocation to healthcare with Rs 35,000 Crore for Covid vaccine in FY 21-22 will ensure that the vaccine reaches the most vulnerable sections of our country, which will improve the overall customer sentiment and buying behaviour, aiding the revival of the economy.”
He further added, “Continuous focus on expanding highways, developing infrastructure, road and rail transport, metro rail projects will play a crucial role in connecting all corners of the country, thereby boosting demand for housing in these areas.”
Boost to affordable housing
In line with CREDAI’s recommendation, an extension of tax holiday for affordable housing projects for another year till March 31, 2022, was announced. Additionally, deduction on payment of interest to buyers has also been extended for one more year. This will boost overall demand for affordable housing, which has been the fastest-growing segment for the real estate sector.
Liquidity measures
To increase liquidity and access to required funding for the real estate sector, the announcement of setting-up of a developmental financial institution with Rs 20,000 Crore and allowing FDI of up to 74% in insurance are some welcoming steps.
Announcement of Asset Reconstruction Company and Asset Management Company to help banks tackle bad loans will reduce the pressure on the banking sector as NPAs shall now be handled by these entities.
Debt funding through REITs, InvITs
Proposed amendments to allow debt funding through REITs, InvITs shall help in attracting more investments in real estate and infrastructure sector. The proposal to make dividend payments to REIT and InVITs exempt from TDS shall encourage retail individual investors to explore investment opportunities in REITs.
Cut on customs duty
Touching upon the steep hikes in prices of steel and other metals, the finance minister announced cut on customs duty on copper scrap from 5% to 2.5%, availability of essential construction materials with regulated pricing is crucial for the sector’s growth.
Ignored demands
Popular demands of changes in the income tax slabs, increasing the limit of 80C, lower home loan interest rates were not announced in the budget. Additionally, the measures required to ensure more money in the hands of taxpayers to encourage spending were also ignored.
“This is a budget for growth with next level reforms, focusing on the healthcare, infrastructure, and financial sectors and establishes a stable tax regime and higher borrowing for CAPEX. The Budget has laid the stepping stone for India’s post-Covid revival mission and has placed India on a global map in terms of resilient economic growth,” concluded Jaxay Shah, Chairman CREDAI National.