Budget expectations: Real estate sector

13 Jan 2022 , 06:52 PM

The Indian real estate market has seen a rebound and displayed a lot of resilience post pandemic. Now, to sustain the momentum, the real estate sector is looking forward to the much-needed reforms and incentives in the upcoming budget, especially as the sector is the primary contributor to economic growth. Even though the government had rolled out certain measures to boost the realty sector, still a lot more needs to be done to catalyse the ailing sector and address both demand and supply side.

This year, the demands go beyond the usual expectation of single-window clearance and industry status. The appetite from end users needs to be rekindled though targeted demand side measures. Personal tax relief, either by tax rate reductions or amended tax slabs, is the need of the hour, which has been long overdue. To boost the consumption in this sector, the government should focus on providing more liquidity to the tax payer by raising the ceiling of the rebate on the home loan interest.

We also expect input tax GST credit for developers, reduction in stamp duty which has happened in several states and registration charges which make a sizeable difference to the cost of a project, thereby boosting home buyers’ sentiment and encouraging them to go in for property purchase. There is need to redefine ‘affordable housing’ to Rs. 50 – 60 Lakhs  as this would expand the benefits for homebuyers and therefore boost the end-user demand. The revival of the real estate sector is imperative for the growth of GDP as well as additional employment generation.

Overall, we hope that the government, through its policies will do its best to get the economy to bounce back, and sustain long term growth of the real estate sector too with substantial measures for both the homebuyers and the developers.

The author of this article is Mr. Ramani Sastri – Chairman & MD, Sterling Developers Pvt. Ltd

The views and opinions expressed are not of IIFL Capital Services, indiainfoline.com