While union finance minister Nirmala Sitharaman’s budget has received acclaim for its emphasis on growth, and impetus to infrastructure and urban planning, some experts believe the government may have missed a trick or two in giving Indian housing a harder push. For instance, the conspicuous absence of tax benefits for homebuyers has stuck out like a sore thumb, and industry voices aren’t exactly pleased.
“The government could have given a further boost to the housing sector given the strong multiplier effect this sector has on the economy,” said Shishir Baijal, chairman and managing director, Knight Frank India.
“The sector would have benefited immensely by demand-boosting tax measures,” Baijal added, “The housing sector has made a substantial recovery from the pandemic lows, and due attention here would have gone a long way in sustaining growth.”
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Some developers too are mostly in agreement with Baijal’s views. Hailing the government’s ‘One Land, One Registration’ system, CREDAI (MCHI) President, Boman Rustom Irani, said developers were hoping for tax rebates from the union budget.
“Industry analysts and developers were hoping for more rebates given the performance and contribution of the sector to the economy in the last few months,” he said, “A simple thing that could have added cheer to homebuyers would have been an increase in tax deduction on home loan interest.”
National Association of Real Estate Development Council (NAREDC) president, Rajan Bandelkar said the Budget missed out on incentives to boost home sales.
“The sector was expecting more in terms of incentives to boost sales and fulfill the dream of housing for all by 2022,” he said, “While the government’s focus remains on affordable housing, the industry was hopeful of incentives under sections 24(B), 80IA 2(A) and 2(B), and bringing capital gains tax on par with equities. Hopefully in times to come, the government will pay attention to these requests too.”
Most other developers, however, reserved special praise for the government’s infrastructural push. “The budget has taken a commendable position of increasing expenditure significantly in order to boost demand and investment,” pointed out Anurag Mathur, CEO at Savills India. Other budgetary announcements such as the commitment to develop 18 lakh low-cost homes at an investment of Rs 48,000 crore in the next fiscal under PM Awas Yojna received widespread acclaim.
“The sector is further buyoyed by the fact that the Special Economic Zones Act would be replaced by a new legislation for the development of enterprise hubs,” said Anshuman Magazine, chairman and CEO (India, SE Asia, Middle East & Africa) at CBRE, “It will cover the existing industrial enclaves and enhance the competitiveness of exports.”
Measures like quicker approvals and enhanced urban planning measures also won praise from real estate majors.
“The industry welcomes the much-awaited focus to resolve longstanding issues of reduction in approval timelines for land and construction,” said Niranjan Hiranandani, national vice president (NAREDCO) and MD of the Hiranandani Group, “There is emphasis laid towards modernization and reforms in building bylaws, TDR reforms, urban planning schemes and transit-oriented multi-modal corridors.”
(Edited by : Jomy Jos Pullokaran)
First Published: IST