Budget 2020 Expectations: Here's What Hopes Real Estate Industry Pin On FM Sitharaman

Like any other sector, the real estate sector has huge expectations from the upcoming Budget. From boosting the residential segment to pushing affordable housing, here's the list of sector’s demands for its revival and to overcome growth obstacles.

Like any other sector, the real estate sector has huge expectations from the upcoming Budget. (PTI)

New Delhi: Union Budget is one of the key events that industries look up to, as it not only make major announcements but also reflects the intent of the government with regard to the economy. As a result, the industry has high hopes from the upcoming Budget 2020-21 which is going to be announced on February 1, 2020. Like any other sector, the real estate sector has huge expectations from the upcoming Budget. From boosting the residential segment to pushing affordable housing, here's the list of sector’s demands for its revival and to overcome growth obstacles. Let us hear out from the people of the industry who will be responsible to deliver the dream homes to the masses. Harinder Singh Hora, Chairman, Realistic Realtors In 2019, there were two clear cut trends that emerged. The residential segment continued to struggle, while the commercial segment thrived. As such, in the budget for 2020-21, we expect Hon'ble Finance Minister to announce some measures to boost the residential segment. Increasing tax deduction limits and providing certain incentives on the purchase of second homes seems to be on the cards. We also expect the government to announce additional measures for improving liquidity situation via a dedicated window and one-time restructuring on loans. The government may also incentivise REITs and InVits so as to develop a robust mechanism for funding to the commercial segment. Rajat Goel, JMD, MRG World We expect that some more measures should be taken to help the affordable housing segment. FM should come with policy changes that can make developers come up with more projects in the segment, people should buy these homes, etc. An announcement for the affordable segment on the lines of the policy being followed in Haryana can be replicated in other areas. Ashish R Puravankara, Managing Director, Puravankara Limited The Real Estate fraternity is expecting few big sweeps at the ‘Union Budget 2020’. Real Estate will have a huge part to play in India INC’s journey to a 5 trillion economy, and boosting the sector will help in employee generation and have other beneficial cascading effects. We expect government to expand its gambit of incentives to the industry at large which will further amplify the momentum displayed in 2019. While aligning itself to the new structural blueprint, the expectations from all stakeholders in Real Estate industry are very high, not just as India INC is moving towards a burgeoning economy but also for the clarion call of ‘Housing for All’. Yash Miglani, MD Migsun Group In this budget we expect the government to take initiatives towards resolving the liquidity crunch to ease the developers and buyers both. In the near past, the government has allocated funds to complete over 1,600 stalled housing projects which came a great relief and to further provide the aid to the developers by making the process of paying back the money to the financial institutions and banks we expect the government to restructure the terms of interest and installments of old loans given to the developers. Amit Raheja, CMD, Wealth Clinic Like any other sector, the real estate sector has huge expectations from the upcoming Budget 2020. To revive the home buyer interest in the sector, the government should increase the income tax benefits for home buyers. The developers expect that the land acquisition should be made simpler and faster and other requisite approvals required from the state functionaries. We expect that the Budget 2020 to announce industry status to the real estate sector and single-window clearance that will further help in raising low-cost funds. Hakim Lakdawala, Group Promoter, Goodwill Developers In the upcoming budget, we are hopeful for measures that will act as a catalyst in implementing the previous steps taken to generate attention in the real estate sector. Developers are expecting a single window mechanism which will create transparency between them and their customers and access to low cost loans by banks will help developers finish their project on time. Swift execution of the recently announced 100 lakhs crore fund for infrastructure growth will also ensure de-cluttering in the metro cities like Mumbai and improving the commute. This will pave the way for better housing. Apart from this, tax benefits for home buyers will be a major lift for the affordable housing segment that will, in turn, attract more investment in the form of FDI and private equity. Sunil Totlani, Director, MKS Ventures Given the prolonged slump in the real estate market, stakeholders have high expectations from the Union Budget 2020-21, starting with rationalization of taxes that we believe is one of the most important factors that the real estate industry would expect at this point of time and steps should be taken to provide clarity and transparency on input tax credit. Ashish Bhutani, MD Bhutani Infra The growth of the real estate sector is marred by the procedural delays which escalate the project cost. To facilitate faster clearance, the government should announce a single-window clearance system that will cut the approval period drastically and will expedite the development process. Secondly, where commercial properties are not sold but developed for leasing, GST at 18 percent is currently applicable. This is an additional burden on the developers and needs to be addressed as it pushes up the cost of construction.” L.C Mittal, Director, Motia Group The government is constantly pushing infrastructure development, but its plan to spend Rs 100-lakh crore on infrastructure over the next five years can only yield tangible economic results with speedier on-ground implementation. There is a dire need to iron out bottlenecks hampering infrastructure growth as once it is removed it will give a fillip to the sector. Also, the granting of infrastructure status to the entire real estate sector is at the forefront as it will help attract more investment. We have seen the impact of infrastructure status on affordable housing with many reputed developers now launching projects in the affordable segment. Besides affordable housing, the government should focus on the commercial segment, which has the potential to attract foreign investment and FDI. The commercial is also witnessing new concepts coming up with the promise of revolutionizing the way business is done in India. The segment which includes retail and office space is expected to develop further. Once its given due attention, I am sure many private equity funds would show interest in commercial office space. Tejpreet Singh Gill, Executive Director, Gillco Group The need of the hour is to announce proactive steps to boost this ailing sector. Besides other issues, the growth of the real estate sector is marred by the procedural delay which escalates the project cost affecting the buyers. To facilitate faster clearance, the government should announce a single-window clearance system that will cut the approval period drastically and will expedite the development process. Otherwise, it should bring concerned permission granting authorities under the ambit of RERA. This will ensure timely approval of projects and developers would not bear the brunt for any delay on the part of authorities. Secondly, the Budget is expected to be in line with the goal of 'Housing for All by 2022'. The government should give certain sops to the developers for affordable housing and attention should be paid towards Input Tax Credit (ITC). We wish for the re-introduction of the input tax credit in GST, which has been withdrawn recently. With the input tax credit benefit, property prices will remain under control. Mr. Anupam Gupta, Director- Sales and Marketing, GBP Group The ongoing liquidity crunch has a cascading impact across sectors, including real estate. Easing liquidity will increase capital flow for developers and also the buyers. Although, the Government announced the upfront recapitalization of Public Sector Banks so as to improve the credit flow in the economy. However, due to the downturn in the market amid NBFCs crisis, lack of confidence amongst homebuyers and banks are wary of lending. We request the Hon’ble Finance Minister to announce a one-time loan restructuring for the sector. Gaurav Gupta, President, CREDAI Ghaziabad We are looking forward to the 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. Also, it will be a perfect situation if the GST is revised for construction materials such as cement to make them more affordable. First of all, the income tax deduction under section 24 must be increased up to 4 lakh. The second most important aspect is the government should ensure land availability for Affordable Housing and the approvals related to the projects. Many times it makes difficult for the developers to get them delivered within a stipulated time due to not getting timely approval. Therefore it should be mandatory to have a time-bound approval system in the sector. Apart from this, new technology is being used day by day to speed up construction. Also, this budget must also aim to increase the present savings limit so that the young population of the country gets a higher spending power and look at the real estate sector as an investment avenue. Parveen Aggarwal, Founder & Chairman, Signature Sattva Any announcement that can help the real estate in tier II and III cities will be helpful to meet the target of Housing for All by 2022. One way is to announce policies that where the buyers too get respite from the cost such as fixing a cost for affordable homes like in Haryana it is around Rs 4,000 per sq.ft. However, the cost should be decided by the government according to the development cost with a clause that the cost will increase as per the inflation.