[ad_1]
Incremental Union Budget makes it the main weapon in the battle to revive the sagging Indian economy. She termed it as a ‘once in a lifetime’ Budget, which created a situation where expectations were very high. While overall, it is a positive budget, for real estate, ‘expectations being high’ was definitely the case. The Budget speech underlined the importance for the Government of India where ‘Housing for All’ is concerned in terms of social security more than a luxury commodity.
Cheers to the home buyers in regards to affordable housing due to the extension of the deadline by a year of the additional Rs1.5 lakh tax deduction given on loans taken to buy a house in an affordable housing project. For real estate developers, affordable housing projects were given an extension for tax benefits, for projects completed till March 31, 2022. It needs to be factored in that affordable housing has been among the fast-growing segments for real estate.
Similarly, tax exemption for notified affordable housing for migrant workers has been proposed under Section 80 I B A of the Income Tax Act and this will be notified in due course of time. This will be positive from a social security perspective, as the affordable shelter will be provided to the underprivileged and migrant labour. Also, deduction on payment of interest for affordable housing being extended by a year will give a fillip to this segment.
The Budget’s commitment to revive economic growth is clear through the measures announced. Building on six pillars, the Hon’ble FM, in her speech, unveiled many unique initiatives such as setting up of a professionally managed Development Financial Institution (DFI), establishment of an asset reconstruction and management company, as well development of a Fin-Tech hub.
In India’s first ‘digital’ Budget, the Hon’ble FM has come up with innovative measures to steer power sustainable growth resurgence. While the economy will gain from various steps proposed, which will positively impact real estate, the proposals also mark the transition from ‘survival’ to ‘growth’.
No direct taxation is among the leading aspects which make it positive for an economy grappling with the effects of the Covid-19 pandemic. A Budget where we have lots of positives, which should play an important role in not just recovery from the Covid-19 pandemic, but also power the growth of the Indian economy to attain the level of $5 trillion.
From a real estate perspective, setting up a long term development financial fund is a good move, as it will create additional lending options and address the liquidity constraint which impacts the industry. The renewed focus on privatization and recapitalization of banks is important, again from the same perspective of liquidity constraint.
The FM, as part of Union Budget 2020-21, announced that an amendment will be made to help REITs, InvITs debt access more investment; to help these trusts raise debt funds from foreign portfolio investors (FPIs).
The one section where the budget lacks is demand incentives, which needed support. Time-bound and proper implementation of the various measures tops the wish list of many Indians. As the Prime Minister pointed out earlier, the last year saw mini budgets across the pandemic impacted time frame. For real estate, especially segments other than affordable housing, the unsaid aspect is that similar steps may happen with more positives in the offing through the upcoming fiscal.
Government lays focus on ‘Minimum Government, Maximum, enhance ‘ease of doing business’, while the proposed stimulus to infrastructure spends sounds spectacular – roads, ports, airports, gas pipeline, warehousing, metro lines etc. This exponential government spending will provide a stimulus for GDP growth, and is impressive.
(Dr. Niranjan Hiranandani is the President of NAREDCO)
[Disclaimer: The opinions, beliefs and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP News Network Pvt Ltd.]
[ad_2]
Source link
