The world’s largest democratic exercise reached its conclusion last month when about 600 million people utilised their right to vote. Over the last five years, the nation witnessed several reforms, decent growth, and economic stability. Indian real estate sector, in particular, saw significant policy overhauls and amendments in older Acts. There was demonetisation, RERA, GST, amendments to the Benami Transaction Act, and a lot of emphasis on the growth of infrastructure. Not to mention, the ambitious Housing for All by 2022.
The re-election means continuity of the ongoing macroeconomic policy and reforms. As the re-elected government prepares to present its first Budget in July, one question looms – what does the Indian real estate sector want from its new government?
We spoke to some industry stalwarts on their expectations from the upcoming Budget. Here’s what they feel would make a huge difference.
The long-pending infrastructure status
“We hope that the finance minister grants the infrastructure status to the housing sector in the upcoming Budget. This will ensure easier access to institutional credit and help in reducing developers’ cost of borrowing for affordable projects. It will further reduce the approval processes and increase transparency in the sector,” said Amit Ruparel, MD, of Ruparel Realty.
Adding to this, Rohit Kharche, Director of The Baya Company, said, “The infrastructure status will not only create a more favourable environment for real estate businesses and homebuyers but also boost economic growth.”
Refinance NBFCs
A recent report by leading property consultancy stated that the liquidity crisis is the major factor preventing completion of over 5.6 Lakh stalled units across the top seven cities.
“For this, the government could increase the finance limits for NBFCs – a major source of funding for developers. This will help revive the sector to a large extent,” informed Anuj Puri, Chairman, ANAROCK Property Consultants.
Reiterating the same, Niranjan Hiranandani, President, NAREDCO said, “The choking of liquidity is taking a toll on the health of companies and further inflicting financial damage. Quick corrective steps should be undertaken by apex bodies and government to pump in enough liquidity in the system to bring economic growth on track.”
Tax benefits
It is high time that the deduction limit under Section 80C is increased to help buyers realise their home buying dream. “This limit was last increased in 2014 after a hiatus of a decade strongly indicates that the government could consider revising it now. Though it will eventually be an added burden on the exchequer, it will help bring back buyers and revive the sector,” added Anuj Puri.
Revised GST for construction materials
“It will be an ideal situation if the GST is revised for construction material such as cement to make it more attractive and affordable. Having a single-window clearance is what we look up to which will be beneficial for both the developers and the consumers,” added Amit Ruparel.
Push to rental housing policy
Another imperative expectation is to frame the National Rental Housing Policy to meet the target of Housing for All by 2022. Wondering how rental policy will help achieve this target? Read here.
Growth-oriented Budget
All in all, India needs a stable political and investment climate supported by growth-oriented Union Budget 2019. Realty sector needs strong demand fundamentals through economic activities, including continued infrastructure development, and easy availability of capital.
“There is a strong demand for affordable housing and office space despite the sunset clause of IT SEZ policy of March’20. This, along with GST and e-commerce driving warehousing and logistics demand is expected to open up significant opportunities for the developers and investors,” concluded Sanjay Dutt, MD & CEO of Tata Realty & Infrastructure Limited and Tata Housing Development Company.
Will this expectation turn into reality in this Budget? Let’s wait and watch!
