APN News

  • Wednesday, March, 2020| Today's Market | Current Time: 11:21:57
  • Manoj Gaur, MD, Gaurs Group and Chairman, Affordable Housing Committee, CREDAI
    We are looking at the upcoming Budget with great expectations as it might turn out to be a day when a lot of policy decisions can be announced to smoothen the functioning of the real estate sector. Last one year has already seen many announcements and measures that has already helped in gaining confidence of the buyer. We that the government in this Budget will take a call on single window clearance, which is long pending and is the best solution to expedite the development process. If not single window clearance then the permission granting authorities should be brought under the ambit of RERA. This would make sure that the permissions are granted on time and the developers should not bear the brunt for any delay on the part of authorities. The Budget is expected to be in line with the goal of ‘Housing for All by 2022’. The government should give certain sops to the developers for affordable housing and attention should be paid towards Input Tax Credit (ITC). Builders are seeing drop in profits which will ultimately be transferred and on to the buyers leading to increase in property prices and hence defeating the purpose of providing housing for all.
     
    We wish for re-introduction of input tax credit in GST, which has been withdrawn recently. With the input tax credit benefit, property prices will remain under control. Also bringing stamp duty and registration charges in the ambit of GST will be highly appreciated if the Budget addresses it. We expect this year’s full-budget to increase the income tax exemption limit of the Income Tax Act, 1961 from the current Rs 2.50 lakh to at Rs 5 lakh, which will encourage people to go in for their own residential premises.
     
    Uddhav  Poddar, MD, Bhumika Group
    We expect the government to focus on infrastructure development of tier 2 and 3 cities and make these cities ready for next round of urbanisation. We also expect the long awaited industry status to the real estate sector as next to agriculture, construction is the biggest employment generator. We expect that Stamp Duty should be subsumed into GST to inventivize home buyers and the overall property market sentiments. Lastly the government must intervene and resolve the NBFC and banking crisis, which is affecting the real estate industry adversely.
     
    Pradeep Aggarwal, Founder & Chairman, Signature Global and Chairman, National Council on Affordable Housing, ASSOCHAM, 
    Affordable Housing sector has been given the infrastructure status but the implementation has not been up to the mark. We hope that the announcements that were made last year regarding the investment towards infrastructure will get a clear picture for implementation. The Budget should also address the issue of making cheaper land available in main cities for the development of affordable housing. Apart from that income tax benefits are also expected to increase which will help in more investment in real estate, which in turn will help the economy.
     
    We expect the Government to double the amount of fund allocation for Pradhan Mantri Awas Yojana. This will enable more people to realize the dream of owning a home and also help the Government in  achieving the goal of Housing for All by 2022.  Finance Minister will have to pay attention to the Input Tax Credit as well, otherwise it will be a direct hit on Affordable Housing as the house becomes even more expensive and will be away from the common man’s reach. Apart from this, Government should reduce the GST to single digit on building material like steel, cement etc as well as contractor service among others.
     
    Gaurav Gupta, President, CREDAI Ghaziabad
    We are looking forward for the industry status to the real estate sector along with steps being taken in the direction of single window clearance under ease of doing business will tremendously help the sector. Also, it will be a perfect situation if the GST is revised for construction materials such as cement to make them more affordable. First of all, the income tax deduction under section 24 must be increase up to 4 lakh. The second most important aspect is the government should ensure land availability for Affordable Housing and the approvals related to the projects. Many times it’s make difficult for the developers to get them delivered within a stipulated time due to not getting timely approval. Therefore it should be mandatory to have a time-bound approval system in the sector. Apart from this, new technology is being used day by day to speed up the construction. Also, this budget must also aim at increase the present savings limit so that the young population of the country gets a higher spending power and look at real estate sector as an investment avenue.
     
    Mohit Goel, CEO, Omaxe Ltd.
    The Government has announced several measures like stress fund for stalled projects, linking of home loan rates to an RBI approved external benchmark and additional tax deduction of Rs 1.5 lac to first time home buyers on homes up to Rs 45 lac. The Government also announced upfront recapitalization of PSBs so as to improve the credit flow in the economy. However, due to the downturn in the market amid NBFCs crisis, lack of confidence amongst homebuyers and banks wary of lending, we urge the Hon’ble Finance Minister to announce a one-time loan restructuring for the sector. This will speed up construction and once construction begins in a full swing, not just consumer confidence but also sales and overall economy will see an upswing.
     
    Dhruv Agarwala, Group CEO, Elara technologies, the country’s only full stack real estate technology platform that owns PropTiger.com, Housing.com and Makaan.com
    “In the last six months, the Government has taken several measures to boost the economy, some of which were particularly aimed at reviving the moribund real estate sector. Most of these measures are likely to bear fruit in the medium to long term.
     
    Immediately, the biggest challenges confronting the real estate sector are liquidity and demand. While the Rs. 25,000cr stress fund/AIF that was announced earlier is likely to solve part of the liquidity crisis, there is an urgent need for a one time loan restructuring for the sector. This would provide significant relief to developers and lead to faster completion of projects. We hope that the Hon’ble Finance Minister announces that measure in the upcoming budget.
     
    On the other hand, to push demand, the government should consider lowering the tax burden on individuals to put more money in people’s hands and also consider providing an additional tax deduction on purchase of a second house. This will help boost demand and lead to an overall growth in the GDP by driving up consumption.”
     
    Vikas Bhasin, CMD, Saya Homes
    The list of expectations from this budget is long including more fund allocation for PMAY, reduction of GST on building material, etc. Apart from the usual real estate segment, the budget should especially focus on the commercial segment, which has the potential to attract foreign investment and FDI. The commercial is also witnessing new concepts coming up with the promise of revolutionising the way business is done in India. The segment which includes industrial, retail and frontier segments such as co-living, is expected to develop further. An increasing number of private equity funds are showing interest in commercial office space and we hope that the FM will help the co-working space to flourish. The granting of infrastructure status to the entire real estate sector is at the forefront as it will help attract more investment. We have seen the impact of infrastructure status on affordable housing with many reputed developers now launching projects in the affordable segment.
     
    The finance minister has to balance fiscal prudence and the urgent needs of the sector. Government should resolve liquidity crisis and announce specific measures apart from the announcement of funds last year. How and when the work will start on the finance part is important for the health of real estate sector. We are also expecting the CLSS budgetary support for both Economically Weaker Section (EWS)/Lower Income Group (LIG) as well as Middle Income Group (MIG) should be doubled so that more home aspirants can purchase their dwelling units.
     
    Dhiraj Jain, Director, Mahagun Group
    Sector has high hopes from the Budget and it is expected that the FM will take care of the liquidity as well as situation of speedy delivery of projects. This can be done if  FM comes with specific plan to provide funds to the real estate sector. Mere announcements might not work as the need is timely implementation of measures to control the situation. A decision regarding Input Tax Credit, cost of raw materials for real estate, availability of cheaper land, etc, will go a long way in addressing the situation at hand.
     
    Dhiraj Bora, Head Corp Comm, Paramount Group
    Government is constantly pushing infrastructure development and we hope that the momentum will be maintained in this budget also. The work on smart cities is stuck and the FM should throw some light on it. The budgetary allocation for the development of smart cities should increase as the present allocation is too low for making the smart cities possible.
     
    Rajat Goel, Joint Managing Director, MRG World
    We expect that some more measures should be taken help affordable housing segment. FM should come with policy changes that can make developers to come up with more projects in the segment, people should buy these homes, etc. An announcement for affordable segment on the lines of policy being followed in Haryana can be replicated in other areas.
     
    LC Mittal, Director, Motia Group
    Government is constantly pushing infrastructure development, but its plan to spend Rs 100-lakh crore on infrastructure over the next five years can only yield tangible economic results with speedier on-ground implementation. There is a dire need to iron out bottlenecks hampering infrastructure growth as once it is removed it will give a fillip to the sector. Also, the granting of infrastructure status to the entire real estate sector is at the forefront as it will help attract more investment. We have seen the impact of infrastructure status on affordable housing with many reputed developers now launching projects in the affordable segment.
    Besides affordable housing, the government should focus on the commercial segment, which has the potential to attract foreign investment and FDI. The commercial is also witnessing new concepts coming up with the promise of revolutionizing the way business is done in India. The segment which includes retail and office space is expected to develop further. Once its given due attention,  I am sure many private equity funds would show interest in commercial office space.
     
    Anupam Gupta, Sales, and marketing Director, GBP Group
    The ongoing liquidity crunch has a cascading impact across sectors, including real estate. Easing liquidity will increase capital flow for developers and also the buyers. Although, the Government announced the upfront recapitalization of Public Sector Banks so as to improve the credit flow in the economy. However, due to the downturn in the market amid NBFCs crisis, lack of confidence amongst homebuyers and banks are wary of lending. We request the Hon’ble Finance Minister to announce a one-time loan restructuring for the sector.
     
    Tejpreet Singh Gill, Executive Director, Gillco Group
    The need of the hour is to announce proactive steps to boost this ailing sector. Besides other issues, the growth of the real estate sector is marred by the procedural delay which escalates the project cost affecting the buyers. To facilitate faster clearance, the government should announce a single-window clearance system that will cut the approval period drastically and will expedite the development process. Otherwise, it should bring concerned permission granting authorities under the ambit of RERA.
    This will ensure timely approval of projects and developers would not bear the brunt for any delay on the part of authorities.
    Secondly, the Budget is expected to be in line with the goal of ‘Housing for All by 2022’. The government should give certain sops to the developers for affordable housing and attention should be paid towards Input Tax Credit (ITC). We wish for the re-introduction of the input tax credit in GST, which has been withdrawn recently. With the input tax credit benefit, property prices will remain under control.
     
    Parveen Aggarwal, Founder & Chairman, Signature Sattva
    Any announcement that can help the real estate in tier II and III cities will be helpful to meet the target of Housing for All by 2022. One way is to announce policies that where the buyers too get respite from the cost such as fixing a cost for affordable homes like in Haryana it is around Rs 4,000 per sq.ft. However, the cost should be decided by the government according to the development cost with a clause that the cost will increase as per the inflation.
     
    Yash Miglani, MD, Migsun Group
    In this budget we expect the government to take initiatives to towards resolving liquidity crunch to ease the developers and buyers both. In the near past the government has allocated funds to complete over 1,600 stalled housing projects which came a great relief and to further provide the aid to the developers by making the process of paying back the money to the financial institutions and banks we expect the government to restructure the terms of interest and instalments of old loans given to the developers.
     
    Sunil Totlani, Director, MKS Ventures
    “Union Budget is one of the key events that the industry looks up to, as it not only provides major announcements, but also reflects the intent of the government with regards to economy, resultantly; the industry has high hopes from the upcoming Budget 2020-21. Given the prolonged slump in the real estate market, stakeholders have high expectations from the Union Budget 2020-21, starting with
    Rationalization of taxes that we believe is one of the most important factor that the real estate industry would expect at this point of time and steps should be taken to provide clarity and transparency on input tax credit. To support millions of first time buyers across the nation, the government should increase the limit of tax deduction for housing loans up to 5 Lakh from present limit of Rs 2 Lakh per annum and last but not the least the longstanding demand of “Industry” status to real estate sector should be now addressed since being one of the top job creating sector, extending industry status will fuel the growth of realty and eventually enhance its contribution to the country’s GDP.”
     
    Ashish Bhutani, CEO, Bhutani Infra
    “The growth of real estate sector is marred by the procedural delays which escalates the project cost. To facilitate faster clearance, the government should announce a single-window clearance system that will cut the approval period drastically and will expedite the development process. Secondly, where commercial properties are not sold but developed for leasing, GST at 18 percent is currently applicable. This is additional burden on the developers and need to be addressed as it pushes up the cost of construction.”
     
    Harinder Singh Hora, Chairman Realistic Realtors
    In 2019, there was two clear cut trends that emerged. The residential segment continued to struggle, while commercial segment thrived. As such, in the budget for 2020-21, we expect Hon’ble Finance Minister to announce some measures to boost residential segment. Increasing tax deduction limit and providing certain incentives on the purchase of second homes seems to be on cards.
    We also expect Government to announce additional measures for improving liquidity situation via a dedicated window and one time restructuring on loans.
    Government may also incentivise REITs and InVits so as to develop a robust mechanism for funding to commercial segment
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