The government has made a number of announcements and initiatives during 2020 to streamline the industry and provide liquidity options for stalled projects; the sector now has high hopes for the upcoming budget. The government is supposed to take the thinking and intervention of last year to come up with announcements that can be introduced in the short term.
“The first and foremost need is to see that the process of permissions get resolved through single window clearance, a demand that has been there for quite some time. Authorities responsible for giving permissions can also be brought under the ambit of RERA to make sure that the permissions do not take much time; this step can be an option if single-window clearance is not announced. We all know that government is promoting Housing for All and for it to become a reality it is important to ease out the cost burden on real estate by controlling the cost of construction; the Budget must have an announcement regarding cost effective materials for the housing being developed under affordable housing,” says Achal Raina, COO, Raheja Developers.
The real estate sector needs government help, and every Indian wants to have a home. The biggest challenges are cost and delay escalation; government must step in through income tax incentives, developers, appropriately priced land, land supply for affordable housing in major cities, and so on. The list of demands is endless because the target is large-to provide houses that they can afford to everyone in the budget and still not compromise on the facilities or the buyers’ deadlines.
Uddhav Poddar, MD, Bhumika Group, says, “We expect the Government to allow for the availing of Input Tax Credit of GST charged on construction of rented property and utilize the same towards the payment of GST on the lease rentals. We also want the government to focus on infrastructure development of tier 2 and 3 cities and make these cities ready for the next round of urbanisation. We also expect the long-awaited industry status to the real estate sector as after agriculture, construction is the biggest job generator, and employs the largest number of workers. We expect Stamp Duty to be subsumed into GST to incentivize home buyers and the overall property market sentiments. Lastly, the Government must intervene and resolve the NBFC and banking crisis, and make credit available for the real estate sector and specifically construction finance.”
To ensure stable economic growth, the FM will be under pressure to tackle all facets of life. We hope that, by growing their disposable incomes, the Budget can allow people to have more purchasing power. Abhishek Bansal, Executive Director, Pacific Group of Malls, says, “The retail segment is looking at measures that could ease out the tax burden on people. Retail activity is one of the crucial aspects of the economy, and the segment would be eagerly waiting to hear about sops that could help it overcome the challenging times of the pandemic.”
The need is to improve economic growth after the pandemic, which will happen if the economic growth vehicles, the commercial sector, get all the support needed to complete the projects as quickly as possible. Ashish Bhutani, MD, Bhutani Group, says, “We expect the Government to come out with steps to address the liquidity issue, and fund allocation for infrastructure in the metro peripheral areas. The help would entail measures such as bringing the real estate sector in the banks’ priority lending list and extending industry status to the whole sector. We hope that the FM will make this Budget count as one-of-its-kind Budget that can bring about the intended economic growth.”
Reforms in the Union Budget 2021-22 are highly awaited, and the sector expects the government to work out policies to fix the liquidity issue, leading to delays in the completion and execution of the programme. “Model Tenancy Law recently passed by UP Govt. has been a great step to bring in professionalism in the sector. More such prudent measures like granting industry status to the sector will help in bringing commercial and residential realty in the banks’ priority lending list. We are hoping FM will review the year gone by, challenges it has presented and the scope of development coming year can offer while presenting this budget. One of the key demands from this budget will be to help the middle income group have more buying power by increasing their disposable incomes. The retail segment is looking at changes that could ease out the tax burden on people,” says Sagar Saxena, Project Head, Spectrum Metro.
