Government Needs To Grant Industry Status To Real Estate Sector In Budget
Source: NDTV Profit
In order to boost demand for real estate in the country, the government needs to grant industry status to the real estate sector, implement single-window clearance and revise the income tax slab to boost demand and open up more financial options for developers, the Goa-based real estate firm Bennet & Bernard Group said in its pre-Budget expectations document. Union Finance Minister Nirmala Sitharaman will present the Budget for financial year 2020-21 on February 1.
The Budget for Financial Year 2020-21 assumes significance as the pace of economic growth in the country fallen to slowest pace in 11 years.
Lindsay Bernard Rodrigues, director at Bennet & Bernard Group which is engaged in developing holiday homes in Goa said, “The real estate sector, which is one of the major contributors to India’s GDP, has undergone significant changes in the last few years, making it more transparent and credible. A series of key decisions taken by the government to revive the realty sector has improved consumer confidence and the impetus given to the residential sector is expected to yield positive results in the near future. These reforms will also be instrumental in attracting investors, institutions and private capital players into the Indian real estate market.”
The government in November last year announced Rs. 25,000-crore special window for stalled real estate projects, in a move aimed at reviving the ailing sector and generating employment. Finance Minister Nirmala Sitharaman said the government will put in Rs. 10,000 crore in the Alternative Investment Fund (AIF) and the remaining amount will be provided jointly by State Bank of India (SBI) and Life Insurance Corporation (LIC).
The fund will help more than 1,600 stalled housing projects comprising 4.58 lakh housing units across the country, Finance Minister Nirmala Sitharaman said while announcing the special window for real estate sector.
Some aspects that the government needs to take into consideration in the upcoming budget are granting industry status to the overall real estate sector, implementation of single window clearance and revision of the income tax slab to boost demand and open up more financial options for developers. Housing loan interest rates also need to be reduced to push demand and sales. A key expectation is the restoration of income tax benefit on a second home which will benefit home buyers in a big way and also stimulate the real estate sector, Mr Rodrigues added in his pre-Budget expectations document.
It is also important that the rental housing be incentivised to address the shortage concern. There is also need to abolish stamp duty or merge it with existing GST rates to cut costs for consumers and also offer personal tax relief. We also expect implementation of land reforms and greater liquidity to NBFCs in the market, which will prompt more investors to come in.
Overall, we hope the government takes measures which strengthen the real estate sector and affirm robust infrastructure growth, Mr Rodrigues said.
“We hope the government takes more developer and investor-friendly initiatives for the betterment of the real estate market. Additionally, a seamless approval process is essential as it could help in faster execution of infrastructure and real estate projects. Overall, the Budget, through its policies, should aim at creating a positive environment in the real estate sector for both the homebuyers and developers.” Mr Rodrigues concluded.