Mr. Rakesh Reddy, Director, Aparna Constructions & Estates Private Limited
Union Budget 2022-23 focuses on inclusive development, productivity enhancement, energy transmission, climate action and financing of investment. Prioritising ease of doing business will help attract new investment opportunities and promote entrepreneurship. Overall, this budget will lay the groundwork for the next 25 years of growth.
India’s growth is estimated to be at 9.27% in the coming year which would match pre-COVID levels. In spite of growing demand, we must also be cognizant of global risks including inflation and supply chain disruption.
In a positive step for the affordable housing segment, 80 lakh households will be identified for the affordable housing scheme with Rs 48000 crore to be invested on the PM Housing Scheme. Further development initiatives include Rs 60000 crore invested on Nal Se Jal scheme which will provide tap water to 3.8 crore households and highway expansion by 25000 km which will improve connectivity.
While the above initiatives are a positive step for the real estate sector and critical to its revival, there are further measures to be undertaken that can bolster demand moving forward.
The government must streamline tax rates and minimise administrative barriers. Disposable income is a substantial constraint on demand so personal tax relief must be addressed by revisiting the tax slabs and also increasing the deduction limit under Section 80C.The real estate sector will benefit from revised income tax slabs that reduce overall tax expenditure. Expanding the availability of income tax deductions for homebuyers can incentivise new buyers and widen the market opportunity.
Mr. Ashwin Reddy, Managing Director, Aparna Enterprises
“One of the biggest positives of this budget is the thrust on infrastructure development. In fact, Infrastructure development is at the heart of this year’s budget with initiatives like PM Gati Shakti, PM Awas Yojana and this focussed approach will not only boost the infrastructure sector but also allied industries like building material sector. The focus on urban planning by supporting the states in areas like modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will also aid the industry significantly. The thrust on ease of doing business (over 25,000 compliances were reduced and 1486 Union laws have been repealed) and the expansion of the scope of PARIVESH will also positively impact the industry. While in a nutshell the budget has given the building materials industry the much needed boost it would have helped the industry further if the GST Rate on cement was reduced from 28% to 18%, fuels especially natural gas was considered under GST, the regulatory processes required for availing housing loans were eased and infrastructure tag to the real estate sector was given.”