The realty industry is not expecting much from the interim budget being presented Friday saying given the elections the entire exercise will be to woo the voters. While saner voices call for a vote-on-account, many are of the view that the Modi government, facing heat from an aggressive Opposition on the back of the drubbings from the December assembly polls, will go all out to woo the voters with many sops. Many expect the interim budget to dangle a mimimum basic income to the poor.
Though the elections have to be completed before June 3 the Election commission is yet to announce the poll dates, giving the government the leeway. Anarock Property Consultants chairman Anuj Puri says any government facing polls usually try to make a strong electoral pitch by offering tax sops or promises of welfare schemes even in interim budgets. Since many previous governments have also done the same, we don’t expect this government to be different.
But he was quick to add that the realty industry must temper its optimism even though some steps to ensure liquidity would be highly helpful. Poddar Housing’s Rohit Poddar says since it’s an election year, populism will rule over sound economics, which “though will delay economic recovery that has been curtailed due to the much needed policy changes which have been wanting.”
Echoing similar views, House of Hiranandani’s Surendra Hiranandani said it is important to be realistic and hope for some measures that will enhance the overall economy instead of specific sectors.
“From a real estate standpoint, last year was largely spent getting acclimatised to the new policies which ushered in transparency and accountability in the sector. We hope that the government looks into some of the key concerns raised by the industry and addresses the same,” he says.
The industry still hopes getting infrastructure status to the real estate in the budget announcement.
“We hope the finance minister grants infrastructure status to the housing sector which will be a boost for developers. Such a move will ensure easier access to institutional credit and help reduce borrowing cost for developers. It will also reduce approval processes and increase transparency,” Ruparel Realty’s Amit Ruparel said.
Knight Frank India’s Shishir Baijal pointed out that since real estate is one of the major contributors to the economy supporting various ancillary industries and providing employment to millions directly and indirectly, a much-needed impetus from the budget can go a long way in helping turnaround the fortunes of the sector.
CBRE India’s Anshuman Magazine opined that the realty sector has already saw greater transparency and accountability since the GST and Rera but clarity on GST on under-construction houses will further provide an impetus to the realty sector.
He further said the government should consider rationalizing the stamp duties/registration costs for Union Territories as well. Piramal Capital’s Khushru Jijina said to stimulate demand, the budget should reintroduce the income tax deduction on both principal and interest on a second home loan.
“The income tax deduction cap on interest paid should be hiked to Rs 5 lakh especially in large cities. Similarly, deduction allowed on principal paid should be also increased,” he added.