In order to streamline the industry and provide liquidity alternatives for stalled projects, the government made a range of announcements and initiatives during 2020; the sector now has high hopes for the upcoming budget. The government should take last years thought and action to come up with announcements that can be enforced 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 support from the government, and every Indian wants to have a home. Cost and delay escalation are the main challenges; government must step in through income tax incentives, developers, reasonably priced land, land supply in major cities for affordable housing, and so on. The list of demand is endless because the aim is broad-to provide houses that can be afforded to everyone in the budget and still not compromise on the amenities or the deadlines of the buyers.
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.”
The FM will be under pressure to tackle all aspects of life to ensure steady economic development. We hope that the Budget will allow people to have more buying power by increasing their disposable income. 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.”
After the pandemic, which would happen if the economic development vehicles, the commercial sector, receive all the help required to complete the projects as soon as possible, the need is to boost economic growth. 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 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 are highly expected in the Union budget for 2021-22, and the sector expects the government to work out policies to solve the liquidity crisis, leading to delays in the completion and implementation 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.