“The year 2020 witnessed the emergence of Shadow Cities i.e. Tier II and Tier III cities, with many people returning to their home towns because of the COVID-19 pandemic. We expect the government to come up with schemes to boost the real estate market in such cities, which is also required to meet the target of Housing for All by 2022.
The real estate sector is also looking for the re-introduction of input tax credit for GST. Additionally, the sector would receive a big impetus if stamp duty and registration charges are subsumed within the GST and income tax exemption limit for home buyers is raised. These initiatives will help in sustaining the improvement in consumer sentiment which was witnessed in the last three months of 2020. The sector also looks forward to CLSS budgetary support for the EWS/ LIG as well as the MIG segment.
The liquidity crunch being faced by the real estate sector needs to be resolved immediately. Although the government has announced the Rs 25,000 crore AIF for stuck projects, the deployment of these funds has been slow. It’s important to expedite the implementation of the scheme. Currently, banks are hesitant to extend funding support to developers. The government needs to work out a mechanism to enable developers to receive funding from banks as that is crucial for completing pending projects. The government also needs to consider reintroduction of the subvention scheme for purchase of new homes.
The single window clearance for projects is a long pending demand of the real estate sector. This issue affects the delivery timelines of projects. Authorities should also be brought under the purview of RERA since delays on their part in granting permissions impacts project completion and delivery, thereby causing major financial losses for builders and heartburn among home buyers.
Rationalisation of raw material prices is a must if the real estate sector has to play a pivotal role in ensuring Housing for All by 2022. Increasing cement and steel prices has been a sore point for the sector, which has been seeking government intervention in managing the prices of construction raw materials.
As part of the Atmanirbhar 3.0 initiative, the government increased the price differential from circle rates from 10 per cent to 20 per cent under Section 43CA of the Income Tax Act, on sale of residential units valued at up to Rs 2 crore, which is a welcome step. The home buyers will be entitled for relief of up to 20 per cent under Section 56(2)(x) of the Act. We expect the government to raise the cut off limit and extend the concession to the luxury segment as well.”