Industry status

Expectations of the 2021 budget: from industry status to 100% FDI in completed residential projects, this is what real estate wants

The developers are also seeking more funding for the sector under SWAMIH so that blocked projects can be completed as a priority.

Indian Union Budget 2021-22: As the 2021 Union budget quickly approaches, the government is expected to do its best to help revive the sectors and industries that have been hit hard by the Covid-19 pandemic. No wonder real estate is betting so big on this year’s budget to boost fortunes.

According to industry experts, in addition to the necessary interventions through budget support, cash injection as well as reform-oriented investments in the first stage of relief measures, the government and the RBI have implemented in recent months other essential measures such as the moratorium on loans, ad hoc restructuring of loans to businesses and individuals, among others to help the sector.

“These measures and concessions have certainly helped improve consumer sentiment, thereby boosting consumption, resulting in increased traction in the real estate sector. However, although we have seen a continuation of the recovery in the fourth quarter which began in the third quarter of 2020, actual transaction volumes in the market continue to be below pre-Covid levels, ”said Ramesh Nair, CEO and Country Head (India), JLL.

Therefore, in order to stimulate consumption, additional measures such as granting an “industry status” to the real estate sector, separately providing for the deduction of the “repayment of principal” on real estate loans, allowing 100 % FDI in residential real estate projects completed through automatic route system, etc., are required.

Uddhav Poddar, MD, Bhumika Group, said: “We expect the government to allow the use of the input tax credit of the GST charged on the construction of a leased property and use it for payment of GST on rents. We also want the government to focus on the infrastructure development of level 2 and 3 cities and prepare these cities for the next round of urbanization. We are also awaiting the long-awaited industry status of the real estate sector because after agriculture, construction is the largest generator of jobs and employs the largest number of workers. We expect the stamp duty to be incorporated into the GST to entice homebuyers and the overall sentiment of the real estate market. Finally, the government must intervene and resolve the NBFC and banking crisis, and make credit available for the real estate sector and in particular the financing of construction.

Ashish Bhutani, MD, Bhutani Group, says, “We expect the government to take action to address the liquidity problem and allocate funds for infrastructure in the outlying metropolitan areas. The aid would involve measures such as the inclusion of the real estate sector in the priority list of banks and the extension of the status of industry to the sector. We hope that the FM will make this budget a unique budget, capable of generating the desired economic growth. “

The increase in disposable income of buyers and the establishment of the one-stop shop are also on the wish list of developers.

Abhishek Bansal, Executive Director, Pacific Group of Malls, said: “The FM will be under pressure to address all aspects of life to ensure healthy economic growth. We hope the budget will help people have more purchasing power by increasing their disposable income. The retail segment is considering measures that could ease the tax burden on individuals. Retail activity is one of the crucial aspects of the economy, and the segment would eagerly await to hear about measures that could help it weather the difficult times of the pandemic. “

Manoj Gaur, CMD, Gaurs Group, says: “After a difficult period in 2020, the sector has high hopes for the next budget. I think it is high time for the government to give industry status to the real estate sector, which will help revive the sector. We understand that the FM has to make tough decisions to ensure that the economy is on the path to recovery, so paying attention to real estate is crucial. The most important aspect is the timely approval of projects, which could be achieved through one-stop authorization that will help the sector to execute the projects on time.

The developers are also seeking more funding for the sector under SWAMIH so that blocked projects can be completed as a priority.

In addition, “PMAY’s timeframe and grant amount should be increased so that first-time households have time to buy their first property and save more. The Input Tax Credit (ITC) should be reinstated in real estate to control costs. Under the one-stop-shop system, the project must get all approvals within the allotted time frame so that the cost of the project can be reduced. In addition, just as builders do not increase costs under the RERA, steel and cement prices should be regulated nationally so that the cost of construction is not affected, ”said Subodh Goyal, secretary of CREDAI Western UP.

Suresh Garg, CMD, Nirala World, said: “Section 80-IB of Housing for All should be reintroduced, in which building an apartment up to 60 meters in height was totally exempt from income tax. . It was a great incentive for affordable housing. To increase the purchasing power of home buyers, the government should grant full mortgage interest repayment up to Rs 50 lakh. The input tax credit (ITC) in real estate has ceased but all other sectors are benefiting from it. Therefore, real estate should get ITC to make home ownership affordable for home buyers. “

Increased spending on infrastructure projects by both government and PE funds is also vital.

“India has pledged to spend $ 1.4 trillion on infrastructure from 2019 to 23 to ensure the country’s sustainable development. In accordance with this vision and the weak economic growth, it is extremely important that the government increase its spending on various infrastructure projects in transport, freight, railways, energy, etc. In addition, PE funds should be encouraged to invest in infrastructure projects with better investor-friendly policies by the government, ”says Prasoon Shrivastava, Founder and CEO of Zepth.