From the single window clearance, NRHP, industry status to tax sops for home buyers , real estate doyens list down their expectations from the upcoming Union Budget 2019.
Most imperative expectation is to frame the National Rental Housing Policy to meet Housing for All target: Dr. Niranjan Hiranandani
New MODI 2.0 government is all geared to set the ball rolling with its first union budget presentation on 5th July. With this, Indian real estate sector builds the wish list in anticipation to give much required impetus to the slow-moving sector.
Real estate is highly labour intensive with huge employment generation of nearly 14% of the total employment. It is one major sector contributing towards the country’s GDP growth of nearly 7%, beyond providing a basic shelter above the roof to all its citizens.
Budget should include tax sops for homebuyers and investors: Anuj Puri
With the Modi Government taking full charge, all sectors have pinned high hopes from the finance minister – who is already saddled with multiple issues including the slowing economy, liquidity crunch due to NBFC crisis, lack of job creation and rising NPAs, among others.
Without compromising on fiscal prudence, the Finance Ministry will have to present a budget that is not only inclusive but also assures growth across industries. It clearly shoulders a considerable share of responsibility for retaining India’s position as the fastest-growing economy.
Development of infrastructure and real estate has been one of the key priorities of the government: Ramesh Nair
The current government’s progressive work implemented during its first term has helped in the sector’s revival. While it has helped in the residential segment’s revival, it has put India’s office and retail segments, and emerging segments such as logistics and warehousing on a global map. The continuity of reforms for the next five years is sure to infuse growth and improve buyers’ and investors’ sentiment.
Implementation of real estate regulation three years back followed by the Goods & Services Tax, the next year, brought in the required structural reforms in the economy.
NBFC capital crunch has negatively impacted the real estate sector: Shishir Baijal, Knight Frank
The Central Bank and government have taken meaningful measures to alleviate the stress in the real estate sector by executing three successive repo rate cuts and rationalising the Goods and Services Tax (GST) regime. Now is the time to look further and focus on more specific issues. Following are a series of expectations from the first Union Budget of the Modi government’s second stint at the Centre:
‘Industry status’ to real estate
With the transformation in the way business is conducted under the reformative Real Estate (Regulation and Development) Act, 2016 (RERA) regime, it is time to recognize the role of the real estate sector as a full-fledged industry. Real estate is one of the major contributors to the economy, as it supports innumerable ancillary industries and …
We hope for measures that will enhance the overall economy instead of specific sectors: Surendra Hiranandani, House of Hiranandani
We hope for measures that will enhance the overall economy instead of specific sectors. Also, the announcements must be backed by concrete plans to ensure that the benefits are percolated to the consumers. From a real estate standpoint, the last year was largely spent getting acclimatized to the new policies which ushered better transparency and accountability in the sector. While the Government has taken several concrete measures, there is still a long way to go. We hope that the government looks into some of the key concerns raised by the industry and addresses the same soon.
The Indian real estate sector is the most highly taxed with the combination of high direct and indirect taxes, stamp duties and levies for development approvals. These extraordinarily high taxes coupled with high interest rates have been crippling growth.
Budget needs to assure economic and financial growth: Manju Yagnik, Nahar Group
As the interim budget is ensuing in the coming days we expect the realty sector to see a complete revival. To maintain its position as one of the fastest growing economies, the budget needs to be a healthy mixture of everything and assure economic and financial growth. Solving the liquidity crisis over NBFC’s by increasing the financial limits is necessary for benefitting the developers at large. Also, to attract more foreign investments it is crucial to build a stronger infrastructure for profitable incentives to be bought into the sector. If the housing loan rates are reduced, it will provide major tax relief and benefits to homebuyers and investors alike. Real Estate sector being a significant contributor to the economy needs a multiplier effect for efficient economic growth.
Imperative for the government to focus on the liquidity crunch: Vikas Oberoi, Oberoi Realty
Reforms like RERA, GST, Insolvency & Bankruptcy Code, together with the first REIT issuance have been a positive for the organized real estate players. We now look forward to some more prudent steps by the re-elected government to encourage home buyers. As the nation undergoes rapid urbanization, it is imperative for the government to focus on the liquidity crunch, land availability, rationalisation of GST with input tax credit benefit and more tax exemptions for the salaried class in the forthcoming budget. A structured approach on reforming the policy framework and taking corrective measures to resolve industry issues, will further enhance India’s position in the Ease of Doing Business rank and making it an attractive investment destination.
Single window clearance will speed up approval process and benefit the sector: Reeza Sebastian, Embassy Group
In the back of several positive developments in the right direction, it is imperative to address some of the gaps with key focus areas in the upcoming budget:
• Successful implementation of RERA (Real Estate (Regulation & Development) Act) in all states, ensuring accountability from all stakeholders concerned.
• Public participation is key to the growth of infrastructure for future. The Government should create awareness among the masses on the need for better infrastructure, even if it means the Pay to use model.
• Ease the liquidity crunch for making funds more accessible to home buyers and consumers, which will again boost Indian real estate sector.
• Developers need to seek on an average of 25 approvals for each project which increases project timelines, delivery and the cost significantly. A simplified online approval process with a single window clearance will speed up the process and benefit the sector.
• Adoption of digital technology will increase transparency and help boost the confidence of global investors in the Indian Real Estate sector. Both government and private parties need to implement the key attributes of block-chain technology to modernize real property conveyance and improve processes for recording deeds and other related instruments.
• There should be a robust government mechanism which can address issues such as hoarders, black marketers and sand mafia or else cartels will be detrimental to the future of the construction sector.
• The much awaited “Industry Status” will simplify the approval process, attract equity investment, improve transparency among other large impetus providing measures to the booming Real Estate sector in the country.
There is certainly a need to relook at the tax structure: Ashok Mohanani, EKTA World
The budget majorly requires discussing the key issue of high unemployment rate, financial sector challenges like the NBFCs crisis and agrarian crisis as this has cumulative pressure on people and the economy. With the looming slowdown in the economy, government is searching for various ways to give a fresh impetus; for instance they are now open to External Commercial Borrowings in real estate. This will see significant funds flow into our industry. This will help us tide over the current NBFC slow down as well. Schemes like 80 I B, permitting ITC in GST, removing deemed rent on unsold inventory and removing the 45-lac cap for affordable housing at least in Metros will stimulate growth.
According to the previous budget the government decided to emphasize more on enhancing overall infrastructure, connectivity, and transportation which reflects the government’s proclivity towards providing a sustainable developed environment. Also, there is certainly a need to relook at the tax structure. There must be reconsideration to reduce the percentage for the 5 lakh to 10 lakh slabs as that will reduce burden and increase disposable income which will aid liquidity.
Focus on infrastructure development will drive real estate demand: Rajat Rastogi, Runwal Group
During its first term, the Modi government had introduced major reforms such as Demonetization, RERA, GST, Benami Transactions (Prohibition) Act, etc in order to support the real estate sector. The expectations are quite high this time, too, as the government will present its first budget after winning with a thumping majority in the recently concluded Lok Sabha elections.
In the past few months, the NBFC crisis has spread its wings in almost all the sectors including real estate. The government needs to take fiscal measures to address the deteriorating NBFC liquidity crisis. If the crisis is not dealt with soon, it will impact the recovery of the real estate sector.
A reform that has been long due is granting the industry status to the real estate sector for a proper overhaul. This move will complement the government’s recent initiatives to bring structure to the industry.
Although the GST for under construction flats and affordable housing has been reduced to 5% and 1% respectively; the input tax credit is hitting the margins of the developers eventually resulting into higher prices for the home buyers. This needs to be addressed soon by the Government.
The government should also focus on infrastructure development as it will drive real estate demand. Increasing the allocated expenditure for infra projects will eventually boost the residential and commercial markets and promote the government’s plan to create smart cities.
We hope for a budget that is conducive and propels the growth of the economy, boosts the real estate sector, benefits the home buyers and provides relief to the developer community.
Rationalism of taxes by subsuming stamp duty in the GST is one of the biggest expectation: Amit Wadhwani, Sai Estate Consultants
The rationalism of taxes by subsuming stamp duty in the GST is certainly one of our biggest expectations from the Union Budget for 2019-20, for the growth of the real estate sector. The liquidity crisis due to NBFC defaults and rising NPAs of banks, along with the piled up unsold inventory due to weaker consumer sentiments on the back of unemployment, is also expected to be considered and carefully evaluated. Having said that, the cut in the repo rate by 25 bps, to 5.75 percent ahead of this year’s budget can be marked as a positive sign for the sector, as this reduction will surely boost the demand for housing. We also look forward to the government’s involvement into two long-standing demands of the real estate sector including — single clearance window, and giving the real estate sector a much-deserved industry status, to attract significant equity investment.
Hope the budget takes a holistic approach towards augmenting job growth in the real estate sector: Farshid Cooper, Spenta Corporation
We hope that the budget under the second term of Modi Government puts the economy and middle class at the forefront and takes a holistic approach towards augmenting job growth in the real estate sector. We look forward to a swift solution to the ongoing NBFC liquidity crisis and intervention from the RBI to stabilize the banking sector. Further we look forward to progressive and sustainable tax laws which will make compliance easy. Additionally there should be a stringent focus on affordable housing and unwavering support of all industry stakeholders to ensure the mission ‘Housing for All’ regains momentum.
Budget 2019 should address the single-window clearance and industry status demands: Madhusudhan G, Sumadhura Group
1) We hope the budget addresses two of the long-standing demands of the real estate developer community, namely: single-window clearance & industry status for the entire real estate sector. These steps will greatly reduce the project timelines for developers and help them procure funds at a much better rate. In the long-run it will help reduce the input cost of construction involved, thereby making the final product viable for the end consumers.
2) As the Industry is facing severe liquidity issues, quick steps should be undertaken by the government to ramp up adequate liquidity into the system.
3) Subsuming of stamp duty in GST is another major demand of developers. It is important that government includes stamp duty in the GST purview to boost the demand for housing.”
Government intervention to address the liquidity crunch is critical: Rohit Kharche, The Baya Company
The first five years under the Modi government have truly been dynamic with concentrated focus on infrastructure development. Urgent and equal attention to the real estate sector is needed in this term.
With the sector facing tremendous difficulties in recent past, government intervention to addresses the liquidity crunch the sector faces today is critical. Aid in terms of making capital available to the industry, reduction in interest rates for developers as well as home-buyers, clarity on the taxation front, etc. would go a long way in bringing stability to the sector and confidence that the industry is finally steering away from turbulent waters.
The expected grant of industry status to the real estate sector along with steps being taken in the direction of single window clearance under ease of doing business will tremendously help the sector. It will not only create a more favorable environment for real estate businesses and home buyers, but also boost economic growth through the second largest employer in the country.
The economy needs urgent stimulus and revival of the real estate sector: Rohit Poddar, Poddar Housing and Development
The economy needs urgent stimulus and revival of the real estate sector, which so many other sectors depend upon. A paramount reduction in interest rates will spur a drastic improvement in the existing liquidity crisis and will ensure the monetary flow in banks and NBFC’s. A clear road map for regulations is needed and further corrective measures should be taken to rationalize the GST. Job creation will take place with increased consumption and economic revival.