Union Budget 2019 might have failed to meet the expectations of the real estate sector, but it surely provided a further boost to the nation’s affordable housing, apart from giving increased incentives to homebuyers—Mamta Sinha
Industry experts say the last few months after the interim Budget have been sluggish for the Indian economy with growth rate being lower than expected. Real estate and infrastructure play a key role in the overall development of the economy and GDP.
Realtors had pegged high hopes on the first budget of Modi 2.0. However, other than the affordable segment, others were kind of left out.
“While the government has pinned its focus on affordable housing in the core real estate sector, the finance minister also announced plans to promote rental housing and work upon a model tenancy law. This decision is in line with global trends of coliving spaces, given the changing demographics in the country. The ‘study in India’ campaign should attract foreign students, enhancing demand for student housing,” says Divya Seth Maggu, senior associate director (valuation & advisory services) at Colliers International India.
The government intends to bring in a mechanism through joint development and concession model to monetise government-owned land parcels for affordable housing. This should help the government raise funds along with increasing activity in the sector. To give further impetus to budget housing, an additional interest deduction of Rs 1.5 lakh over and above the existing Rs 2 lakh deduction will be applicable for loans on houses priced below Rs 45 lakh.
While tax benefits are aimed at encouraging people to buy houses, the liquidity problem is intended to be addressed through recapitalization of PSU banks and support to securitization for NBFC assets. This may help provide some liquidity and credit flow to cash-strapped developers.
“With an investment target of Rs 100 lakh crore in the infrastructure sector over the next 5 years, the finance minister has given a ray of hope to the current and future developments in the country. The plan to restructure the national highway programme and create a network of highways grid and road corridor projects through the Bharatmala Pariyojana will boost the infrastructure sector, which will help in bridging the rural-urban divide. This policy will now open a slew of opportunities for real estate development in the country, as it will enhance connectivity across the nation and pull in investors,” Ashish Sarin, CEO of AlphaCorp, said.
Source : TOI
