The NDA-led government brought new hopes for the country after its legendary win in the General Elections 2014. Hence, this year’s Union Budget is one of the most awaited budget sessions. Along with some long impending reforms, the industry is hoping for some new announcements in the upcoming budget. The major points of concerns raised by several industry experts are affordable housing, housing for all and rebates on housing loans and taxes.
Though the Government intends to provide Housing to All by 2022, the claims are yet to be tested in this session. The execution of the Affordable Housing Policy could plant the first steps for achieving this dream. Ravindra Chamaria, CMD, Infinity Group, a Kolkata-based real estate developer, says, “Mass or affordable housing is the necessity of the day for India. Affordable housing should get its due fillip as there is ample land available for it.”
In order to make real estate more feasible for middle-income investors, the industry also expects considerable sops in the interest rates on home loans. Recently, the Reserve Bank of India (RBI) had reduced the lending rates by 25 points, bringing cheer amongst all stakeholders. However, the industry expects more such cuts in the coming times as corrective measures towards the inflated economy.
Lalit Kumar Jain – CREDAI Chairman and CMD of Kumar Urban Development Pvt Ltd says, “There is a need for a roll back of all liquidity tightening measures and making cost of funding cheaper for both homebuyers and developers, than what it is today. A reduction of 200 basis points (i.e. interest rate cut by 2%) within a short span is needed. The government and RBI must take appropriate steps to ease fund restrictions for realty.”
Other than cut in interest rates, developers are also seeking relaxation in taxation norms to give the necessary impetus to the realty market. Going specific, Ajay Aggarwal, Managing Director, Microtek Infrastructure says, “In the upcoming Union Budget, we are expecting some initiatives on wealth tax, 80C limit and tax benefit on home loans, besides broader reforms on overall taxation system.”
The focus is not only on boosting the capital real estate market, but also the rental market this time. As per experts, moves like removing capital gains tax ceiling of one house and offering tax exemptions on rental income raised by affordable houses could promote rental housing in the country.
In addition to these reforms, the industry is also pinning hopes on getting the clearance for impending issues such as Infrastructure Status for Real Estate Industry and Single Window Clearance. Presently, the approvals processes are lengthy and take almost 1-2 years, resulting in an overall delay in the project. Implementation of Single Window Clearance would reduce this time considerably, eventually reducing the cost liability on homebuyers.
Unlike previous budgets, this budget is special from the point of view of vision and change in direction. There are lots of expectations across various sectors of economy. Ajay Aggarwal, Managing Director, Microtek Infrastructure says, “This budget is important because we seem to be just overcoming the state of negative market sentiments and policy environment. After this budget, we expect an environment in which housing to all with gather steam, entrepreneurship will thrive and jobs will be created.”
Well, all these are still expectations. Let’s wait and watch what’s in store for the industry this time!