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Before the Finance Minister Nirmala Sitharaman presents the Union Budget in the Parliament on February 1, 2021.
Here’s what the Real Estate Industry sector expects from Finance Minister Nirmala Sitharaman:
Arun Malhotra, CEO, AM Estate Developers:
“The real estate sector contributes 8% to India’s GDP and therefore, it has a few justifiable expectations from the 2021-22 budget. Let us understand what those expectations are. According to section 24 of the Income TaxAct, the homeowners can get a rebate of up to Rs 2 lakhs on the home loan interest if the owners reside in the property. The real estate sector expects the government to raise this ceiling to Rs 5 lakhs to attract more customers. Personal tax relief, either by tax rate reductions or amended tax slabs. The present GST rate for properties that are under construction is as follows:·
5% minus the ITC benefit for premium homes (>INR 45 lakhs).·
1% for affordable homes(<INR 45 lakhs).
Even if the government introduces a limited period GST cut, it would still boost the demand for under-construction properties. The capital influx from the buyers would allow the builders to finish their projects faster as well. More incentives for private sector investments in affordable housing. Even though affordable housing is an important segment, the profit margins still remain low and therefore, a stimulus from the government is direly needed. The real estate sector has been dealing with several liquidity issues ever since the pandemic hit our shores. An urgent liquidity stimulus is needed by the government to prevent the sector from stalling”
Ar. Dikshu Kukreja, Principal Architect & Urban Designer, CP Kukreja Architect:
“As India strides towards urban development and as the population of the country moves towards cities, with urban migration continuing unabated, it is expected that within the next ten years, 40 per cent of the country’s population would be living in cities. This means that we would be requiring a size equivalent to a new Chicago metropolitan area every year to take care of the large population accumulation due to this urban migration. It is therefore imperative that we spend the budget with a thrust on the urban improvement strategies, in addition to some policies which are already in place such as AMRUT, Smart Cities, etc.
These also need to be implemented with a special focus on aspects of environmental issues such as quality of air and water, land and our natural resources. We cannot continue to wait and watch as our cities and the quality of living deteriorates and becomes a health hazard for all. For the country to progress, the thrust has to remain on infrastructure; one expects more to be spent on education (schools, skill centres etc.), healthcare, public transportation which are going to be the main drivers of the economy in the coming years.”
Vikas Chaturvedi, CEO of Xanadu Realty:
“Real estate in India is on a path to recovery since the initial wave of pandemic-induced lockdowns, thanks to short-term measures such as the reduction in repo rate by the RBI and the subsequent decrease in home loan interest rates. However, to ensure that the sector continues to register strong growth in the long run, the government must make certain policy interventions to revitalize market demand and support players operating in the space. Reduction in GST on construction materials will help bring down costs further.
Extension of GST reduction benefits to ancillary industries will automatically lead to support to the Real Estate industry. From a buyer’s point of view, income tax relief such as increasing the deduction on Principal repayment under 80C for home loans will prove beneficial to the sector. Measures such as relaxing stamp duty on property purchase and reducing the income tax on owning a second home will also boost consumption. Furthermore, the industry could use establishing more funds for the developers to initiate new large-scale projects for the creation of residential townships and business parks, like the SWAMIH Fund is for the stalled affordable housing and brown-field projects.
Implementing these measures will boost confidence amongst both consumers and real estate developers, enabling the sector to build on its robust FY 2020-21 Q3 performance and accelerate its recovery, which is extremely crucial to the economy where Real Estate can be a nearly 7% contributor to the GDP.”
Dr. S Vasudevan, Founder, Chairman, and Managing Director of Ozone Group:
“The Realty industry is one of the bellwethers of India’s economy and contributes more than 8 percent to the Indian economy employing more than 30 million people. It is an important industry as it has a ripple effect on other ancillary sectors. Therefore, any measures taken to uplift the sector will have the potential to revive the overall economy. Over the past couple of years, the industry has been working towards fulfilling our PM’s vision of ‘Housing for all by 2022’. The Government has also taken proactive measures that are commendable, but given the present market conditions, the industry needs more focused measures to further bolster demand in 2021.
Expectations from the Budget this year are: 1. A regulatory authority especially for the cement and steel sectors to regulate the price and thereby curb the rise in construction cost and instances of cartelization. 2. The Government should adopt a uniform policy across all states in the reduction in stamp duty for various instruments related to real estate transactions, for the next 18-24 months. This would give a fillip to the homebuyers. 3. Reduction in premiums for TDR, FSI, etc. To enable more cost-effective/cheaper products for all end users. 4. Reduction in GST across all sectors of Real Estate, to bring down the overall property cost and push demand.”
Mr. Anand Shukla, Managing Director, Ocean Infraheights Pvt. Ltd. (Golden I):
‘This pandemic has wreaked havoc on the real-estate sector too! Considering that real-estate is the second-largest job-creating sector in the country, we are hoping that the Government looks at doing something concrete for the sector, keeping customer sentiments in mind. Especially from a commercial real estate perspective, we are looking forward to reforms and incentives that encourage the manufacturing, start-up sectors, etc.; offer interest or capital subsidies on systems and equipment for all players looking to invest in technology, sustainable building, and digitization of operations.
Furthermore, we hope that the central and state governments can work together and take a look at reducing GST, stamp duty, and circle rates.