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Construction Week speaks to people across the industry to understand expectations from the Union Budget 2022
Sandeep Runwal, president, Naredco Maharashtra and MD, Runwal GroupThe government will continue to put in its sincere efforts in pushing affordable housing. The cap of Rs 2 lakh per annum against interest rate deduction under section 24(b) of the Act needs to be hiked to at least Rs 5 lakh along with removing the Rs 45 lakh cap from affordable housing, which will boost the affordable and mid-segment housing in a big way.We also expect the government to continue promoting the affordable rental housing schemes by announcing tax reliefs for rental housing projects, which will fast track the pace of investments in these schemes. We expect tax sops for first-time homebuyers and look forward to re-introducing GST with an input tax credit on under-construction properties that will generate demand among homebuyers. We also urge reintroduction of subvention schemes, helping the homebuyers to align their payments and encourage them to take a decision on home buying.The quantum of the SWAMIH stress fund needs to be enhanced along with strengthening the financing institutions to generate adequate liquidity and help the completion of stuck realty projects.
Dhruv Agarwala, group CEO, Housing.com, Makaan.com and Proptiger.comHousing demand did bounce back strongly after the first and second wave, driven mainly by historical low interest rates on home loans. However, the sector is still plagued with two perennial problems — unsold inventories and stalled projects.The corpus of the government-backed stress fund SWAMIH should be hiked to at least Rs 1 lakh crore. This will help in completion of stuck projects and bring back the much-needed consumers’ trust in under-construction projects. The government should give more tax incentives for both principal and interest paid on home loans. The Credit Linked Subsidy Scheme (CLSS) should be extended for EWS-LIG and reintroduced for the MIG segment. The government has taken some bold measures to promote rental housing — framing of model tenancy law and launch of Affordable Rental Housing Complexes. Tax sops should be provided to boost both supply and demand of rental housing. Rental yields are lower in residential properties compared with office assets. This can be compensated through tax incentives to developers and property buyers.
KE Ranganathan, MD, Roca Bathroom Products
India has done exceedingly well on covid front with minimal damage to human lives and economy during year 2021-22. With superb execution of vaccination, calibrated unlocking and pent-up demand, all leading to well deserved likely 8.5% GDP growth in 2021-22.The government can now focus on ‘heavy lifting’ of economy through investments in infrastructure and making funds available through the financial system for scores of MSMEs and gig workers to play the catalyst role.Also, government should help generate more demand from consumer side through adequate measures like sops, tax benefits, concessions etc. Tourism presents a great opportunity both for international tourists and within India local tourists, as people are excited to travel and get out of home.Investments in the direction of hospitals, research and development in pharma sector, primary health care across all key cities and semi-urban/rural areas will help manage increasing need for such facilities due to outbreak of pandemic like Covid.By 2030 there is a clear indication for India to move to 3rd spot globally on forex/GDP size (behind USA and China) from the current 7th position. This can be possible with a good direction in the development of the country in driving investments, providing top class governance and making India the first port of call for foreign investors.
Abhyuday Jindal, MD, Jindal StainlessThe upcoming Union Budget (FY23) must restore countervailing duty (CVD) imposed on stainless steel products from China and Indonesia. These CVDs were imposed in September 2017 and in October 2020, respectively, after detailed investigations by the Directorate General of Trade Remedies (DGTR), Ministry of Commerce, which conclusively proved the existence of non-WTO compliant subsidies in these countries.Ever since their suspension, imports shot up by 300% and 339% from China and Indonesia, respectively, in the first half of this fiscal compared to the average monthly imports of the last fiscal. Today, Indonesia, with a manufacturing capacity of 55 lakh tons aided by Chinese investments, and with a domestic consumption of only 2 lakh tonnes, has displaced India to become the second largest manufacturer of stainless steel in the world.There’s uncertainty in the business and investment climate in the stainless steel industry once again. We’re already staring at job losses in MSMEs, and the transition of small manufacturers into mere traders. The dream of ‘Atmanirbhar Bharat’ is sadly taking the shape of an ‘Aashrit Bharat’ in reality.”
Rohan Khatau, director, CCI ProjectsAs the sector has exhibited strong growth and resilience through unprecedented times, it is expected that the budget focuses on foreign and domestic investments while facilitating policy support, which brings in further reduction in the home loan interest rates. Waivers on GST rates for under-construction properties and incentives are expected to enable private investment in the affordable housing sector. With various financial aids such as the SWAMIH Fund initiative, stamp duty reductions, and low repo rates during the year 2021, the sector has flourished exceptionally. To strengthen this momentum, we anticipate significant and beneficial reforms for the sector overall.
Bhushan Nemlekar, director, Sumit WoodsThe government and the RBI have done enough to bail out the real estate sector from depression, as it remains one of the most precise bellwethers of the state of India’s economy. The budget for 2022 will surely bring a positive outlook for the sector and we look forward to further emphasis on tax incentives, GST waivers, and Affordable housing this financial year. A series of key decisions taken by the government recently to revive the realty sector has improved consumer confidence and the impetus given to the residential sector is expected to yield positive results in the near future.
Sonali Priy Kapoor, founder and MD, The Hatch ProjectWith the residential real estate sales across top 8 cities bouncing back to almost the pre-pandemic market share, the real estate sector is postulated to drive a strong revival in 2022 with new style of living. However, with the new spike in cases, uncertainty still looms to the sector. The industry is expecting the introduction of a robust strategic roadmap and higher support, from the Union budget, 2022. The sector may witness an increased capital outlay with few tax relaxations, to further the agendas of providing both, affordable and rental housing and boost the focus on real estate innovations and digitization, to make the sector future ready.
Manas Mehrotra, founder, 315Work AvenueAmidst this new normal, the flexible co-working industry has become more relevant than ever and the demand for co-working spaces have surged significantly. We expect the government to enable co-working firms to claim input credits on work contract and construction services supplied, as detailed under GST provisions that can enable outflow of cash and can be spared from 18% levy, which is crucial in this pandemic time. The co-working industry also expects special packages and tax relaxations for the start-up sector as this will boost the existing and upcoming start-ups. Presently, the rate of TDS applicable on coworking services is 10% as coworking companies provide renting of both movables and immovables. As the industry is going competitive, it will be good if the rate of TDS on coworking services is reduced. We also hope for the extension of Investment Tax Credit (ITC) to developers as this would imply lower lease rates to tenants and benefit coworking players. Currently, coworking spaces charge a GST of 18% to all clients and this is a big impact to startups.
Aditya Chamaria, MD, Damodar Ropeways & InfraWe expect the Government to introduce measures in this Union budget 2022-23 which will help to improve the potential of ropeways, boost tourism and enhance urban transport connectivity.GST on ropeways currently is at 18%, which is higher than that on air travel at 5% (economy) 12% (business class), Railways (5%), highway tolls (0%). In fact, ropeways should be treated at least at par with Railways where the GST is 5% with input tax credit, because they cater to all sections of society.The ropeway projects are mostly situated in hilly areas, and the cross section of consumers availing the services comes from the average earning socio-economic class of people and a large percentage are villagers going on a pilgrimage. For ease of doing business and fast-tracking new/proposed projects, especially for tourism or urban transport systems, support from the government is needed. in streamlining the process of licensing, permits in construction of ropeway and cable car projects and even those under O&M.We are witnessing that a larger number of tenders are being floated, but the government is still focused on promoting CEN standards (European) for validating a ropeway project. Indian BIS standards have been upgraded recently and are very much at par with the CEN standards. Benefits of this hybrid model will go a long way, as it will significantly reduce the cost of the overall projects by at least 15% to 39% without any compromise on the standards of safety or quality.
Kaushal Agarwal, chairman, The Guardians Real Estate AdvisoryDeviation of 20% from circle rates should be extended across the sector and not limited to homes costing upto Rs 2 crore. Currently the major part of the unsold inventory is ready-to-move-in and falls in the luxury category.There couldn’t be a more opportune year to accord industry status to the real estate sector as a whole; currently the same has been accorded only to affordable housing. After the decent success of its SWAMIH fund, they should announce more funds that can help target specific real estate verticals that need liquidity support and high capital infusion.The reduced repo rate has helped reduce EMI’s for homebuyers; the government should permit further deductions in the income tax for individuals availing homes to buy affordable and mid-income homes.The government should declare tax free, the rent income received from any one owned house across the country. The same will see the young, new age investor pour money in real estate.
Ramani Sastri, chairman & MD, Sterling DevelopersThe Indian real estate market has seen a rebound and displayed a lot of resilience post pandemic. This year, the demands go beyond the usual expectation of single-window clearance and industry status. The appetite from end users needs to be rekindled though targeted demand side measures. Personal tax relief, either by tax rate reductions or amended tax slabs, is the need of the hour, which has been long overdue. To boost the consumption in this sector, the government should focus on providing more liquidity to the tax payer by raising the ceiling of the rebate on the home loan interest. We also expect input tax GST credit for developers, reduction in stamp duty which has happened in several states and registration charges which make a sizeable difference to the cost of a project, thereby boosting home buyers’ sentiment and encouraging them to go in for property purchase. There is need to redefine ‘affordable housing’ to Rs 50-60 lakhs as this would expand the benefits for homebuyers and therefore boost the end-user demand. The revival of the real estate sector is imperative for the growth of GDP as well as additional employment generation. Overall, we hope that the government, through its policies will do its best to get the economy to bounce back, and sustain long term growth of the real estate sector too with substantial measures for both the homebuyers and the developers.
Lincoln Bennet Rodrigues, chairman & founder, The Bennet and Bernard CompanyThe residential sector is seeing a strong bounce back from the coronavirus pandemic crisis. More tax sops and higher relief on the home loan rates will woo broader segment of homebuyers and investors to buy property. The existing tax exemption on housing loans should be raised to give impetus to buyer sentiment. There is specific need for income tax relief on a second home which will benefit home buyers in a big way and also stimulate the real estate sector. It should also strengthen the existing financing systems to provide liquidity as developers need a rational capital flow. We are also hoping for GST reforms as this will reduce overall property cost and push demand for homes, granting of industry status to the overall real estate sector and implementation of single window clearance amongst others.
Manju Yagnik, vice chairperson, Nahar Group and senior VP, NaredcoThe lowest home loan rates along with reduction of stamp duty converted into phenomenal momentum. The ongoing support from the government and its related agencies, with the onset of the pandemic, has ensured good volumes of transactions and we expect the continuance of support in the forthcoming budget to ensure complete recovery of the sector.We expect that waiver on the GST front be it for under construction properties and for raw materials viz. steel and cement prices firming up. GST waiver will augur well with the industry for continued sales momentum. A GST Waiver could renew the focus of developers on new projects and would also help build sustained liquidity for the entire industry.Apart from the GST waiver, the focus should also be on providing an impetus to both affordable and rental housing as well as strengthening the existing financing systems to provide liquidity to real estate projects that need dire support. The real estate sector could also witness more stability with a low-cost credit ecosystem, through priority sector lending categorisation of home loans.”
Ravindra Pai, MD, Century Real EstateReal estate demand, especially in the residential segment, is witnessing a revival post the pandemic-induced slowdown. Given the rising cases in the third wave and increasing input prices, policy measures must help sustain this momentum in the construction industry, the second-largest employer in the nation. The revision of GST Input Credit and additional incentives for affordable housing such as increased FSI, minimal stamp duty till 75 lakh unit sizes for urban areas, an increase in unit sizes under the affordable housing scheme, an increase in the personal income tax-deductible limit of Rs. 2 Lakh, and an extension of the tax holiday scheme are some measures that need to be considered. Infrastructure status for construction is a long-standing demand that can help unlock a better credit ecosystem for the sector.
Kshitish Nadgauda, senior VP and MD, Louis Berger International-AsiaOur expectations are that the priority infrastructure schemes identified in PM Gati Shakti and the National Infrastructure Pipeline should be effectively implemented starting in 2022. There should be increased budgetary allocations for Metro Rail projects in Tier 1 and 2 cities, railways including high-speed and semi-high-speed intercity links, highways and expressways, ports and regional airports towards the much-needed development of the nation. A suitable framework should be established in the Budget for funding such programs and projects through debt financing through Development Financial Institutions, Infrastructure NBFCs, long-term investors such as domestic and foreign pension funds (FPFs), sovereign wealth funds (SWFs), infrastructure investment trusts (InvITs), etc. Finally, the Government should also focus on the de-densification of urban settlements through low-cost housing programs and through the establishment of greenfield development nodes with state-of-the-art infrastructure away from existing urban centres.
Ankit Kansal, founder & MD, 360 RealtorsIt is imperative for the government to help the supply side through deeper and wider policy reforms such as interest subsidies to developers, faster mechanisms to obtain clearance and reduced GST rates. Likewise, the budget should also take prudent steps to boost demand in the form of increased tax subsidies, lowering of stamp duty, etc.
Rajat Goel, joint MD, MRG WorldAffordable Housing sector has been given the infrastructure status, but the implementation has not been up to the mark. We hope that the Budget will address the issue of making cheaper land available in main cities to develop affordable housing. Apart from that, income tax benefits must also increase, which will help in more investment in real estate. Apart from this, the Government should reduce the GST to a single digit on building materials like steel, cement etc and contractor service, among others.
Gurpal Singh Chawla, director, Spaze GroupThe Budget should focus on the commercial segment, which has the potential to attract foreign investment and FDI. The granting of infrastructure status to the entire real estate sector is at the forefront as it will help attract more investment. The finance minister has to balance fiscal prudence and the urgent needs of the sector. Also, this Budget must also aim to increase the present savings limit so that the young population gets a higher spending power and look at the real estate sector as an investment avenue.
Amit Modi, director, ABA Corp & president (Elect), CREDAI Western UPOne of the most long-standing demands being ‘Industry status to real estate sector’, not having an ‘industry status’ becomes difficult for the real estate sector to avail legitimate finances from banks and other financial institutions. We also expect that the input credit regime should be brought back into the GST regime as far as the residential real estate is concerned. With all the benefits being passed on to the homebuyers, if it gets implemented the benefits achieved will make the entire home buying process affordable. Authorities must address the long-standing demands from the developer community which include Single Window Clearance to facilitate faster deliveries and project completions, exemption limit on interest on home loan, for supporting millions of first time buyers across the nation, and Principal Deduction Rules Under Section 80 C to be implemented. Alternatively, the limit under Section 80C should be increased to Rs 3 lakhs.
Deepak Kapoor, director, Gulshan GroupAmid the third wave, it is the perfect time to provide industry status to the real estate sector. This will give developers ease of availing cheaper credit facilities from financial institutions and banks. Terminating stamp duty and registration charges in the gamut of GST would be highly acknowledged. The sector is counting on the government; we hope that the Budget will help people to have more buying power by increasing their disposable incomes. Due to WFH, the commercial segment has suffered the brunt so it is eagerly waiting for sops that could help in overcoming the after effects of multiple lockdowns and curfews.
Navdeep Sardana, CMD, Whiteland CorporationOur expectations from the Union Budget 2022-23 will be related to the real estate sector being awarded the infrastructure status. The status will help the sector achieve multiple tax benefits to boost foreign and local investment. The investments from international institutional funds will be exempted from taxes, as they will be termed infrastructure funds. This will eventually reduce borrowing rates for the developer fraternity, which is already marred by unsold inventories and higher costs of credit. A GST waiver for under-construction properties and incentives for private investment in the housing sector will reap far reaching benefits. We sincerely hope these recommendations are considered in the upcoming budget.
Shraddha Kedia-Agarwal, director, Transcon DevelopersAmid the pandemic, the government has recalibrated its approach towards remobilizing the economy and introduced various reforms to ensure adequate liquidity in the system such as keeping the interest rates low, additional liquidity support to NBFC and HFCs. The upcoming budget needs to be more attractive to foreign investors as it will be an ultimate platform to announce further incentives which will attract more foreign investments into the sector. We expect the government to reduce the tax on interest income which will help accelerate capital inflows to India. Liberalizing foreign investment norms in real estate is another widely expected move.The residential real estate market in India has become more lucrative for NRIs as a result of the increased transparency due to RERA and ease in investment norms. Given their efforts towards nation building, the NRIs expect the forthcoming Budget to reward them with sops such as ease of compliance under the Income-tax Act and reduction in withholding tax rates, among other relaxations.
Pritam Chivukula, co-founder & director, Tridhaatu Realty and Hon. Secretary, Credai MCHIResidential sales in the top 8 cities have bounced back to near pre-covid levels. We should look at a multi-dimensional approach focused on the availability of improved & low-cost credit, forward-looking FDI inflow which allows foreign investment in completed housing, and inclusive participation in the start-up ecosystem through a dedicated fund focused on real estate innovations and digitization could go a long way in making the sector excel in 2022. Additionally, developers are hoping for provisions that will benefit the growth that includes the deduction of loss under house property, reduction in the income tax burden on rental housing and long-term capital gains on capital assets, relaxations in provisions for REITs for faster recovery in commercial real estate. We have also written to the government to urge for a reduction in tax for investments on Real Estate Investment Trusts (REITs) and, also demanded tax-neutral consolidation of businesses through the mergers, in order to help the homebuyers who got trapped in delayed housing projects.”
Farshid Cooper, MD, Spenta CorporationWith signs of revival already visible over the last few months, the realty sector is looking at robust housing demand in 2022 and beyond. While interest rates are already at their lowest, a tax holiday for homebuyers will go a long way in boosting the market sentiment, nudging fence sitters to take a decision. Focus should be given to stalled/ stressed projects, apart from providing impetus to affordable and rental housing as we enter 2022. This will likely free up capital and provide liquidity to the sector. Additionally, serious thoughts need to be given to GST towards major input materials as the rising cost structure could lead to long term increase in prices thereby softening demand.
Mukund Deogaonkar, director, India, Planet Smart CityStrategic measures by the government of India for 2020 & 2021 budget, real estate and allied sectors have benefitted, resulting in historic sales and registration, thereby garnering impetus for the sector’s growth and building consumer trust. With the Omicron variant, the health and infra sectors face a challenge to contain the anticipated third wave and any other outbreaks of similar magnitude.Moreover, it will be interesting to see if financing schemes for affordable housing sectors are extended to mid-segment. While the government of India has done all it can to offer relief to the sector even during these hard times, we urge the consideration of the aforementioned to further help in stabilising demand. We are hopeful that the upcoming Budget will bring realty under the infrastructure status, unlocking a slew of tax incentives to increase international and domestic investments and uplift the overall demand in the industry.
Rishabh Siroya, founder, Legend Siroya; president (Elect) Naredco NextGenThe current provisions and tax breaks given by the government have proved to be life-saving to the real estate sector. We thank the govt for their considerations and request to bring the input tax credit on GST to developers. This will help in keeping the prices in check for raw materials, which have sharply increased in the past year and also help bring down the cost of homes to end users by passing on the benefits of savings.
Harish Sharma, founder & CEO, PlinthstoneThe government should strengthen the existing financing systems to provide liquidity to stuck real estate projects. Also, the financing scheme for affordable housing should be extended to mid-segment (home up to Rs 2 cr) as well. Long-term capital gain from the sale of house property should be taxed at 10%. National income from house property held as stock in trade needs to be removed, so that ‘build to rent’ gets incentivized. I am also expecting govt. to extend the tax holiday and rental housing by providing tax exemptions to notified rental housing projects. Further, to extend the benefit of additional interest deduction on home loans for first-time homebuyers in the affordable segment (the current exemption is till March 2022 )
Dr Atul Goel, MD, Goel Ganga Group & president (Elect.), Naredco PuneWhile the real estate sector is looking at a robust housing demand revival in 2022, it also expects the Union Budget 2022 to play a supportive and enabling role. The real estate sector is looking at a few tax relaxations such as hike in Rs 2 lakh rebate under section 24, as in the aftermath of the pandemic, the profit margins are already low and developers have to compensate for the lost time. A single window clearance mechanism has remained a demand for many years now. In addition to this, it is an opportune moment to award industry status to the real estate sector so that it can avail cheaper credit facilities from financial institutions. In addition to this, a GST waiver for under-construction properties, and incentives for private investment in affordable housing sector will be enabling. Easing of liquidity and short term tax holidays might go a long way in boosting overall recovery of the realty sector.
Nakul Mathur, MD, Avanta IndiaIn the new budget, we would request the finance minister to reduce the TDS deduction rates on coworking spaces as most of the receivables from the client is towards services. It would be best if the finance minister considers to bring coworking spaces into 2% TDS slab as in case of services from the present 10% . This will immensely help the coworking spaces in management of their cashflows.
Raghunandan Saraf, founder & CEO, Saraf FurnitureWith the government’s strong focus on big bang reforms to strengthen the economy and promoting entrepreneurship through ‘Make in India’ and PLI schemes is a big plus, expectations are high from the upcoming. The finance minister will aim to support the tax payers in direct or indirect ways to boost the disposable income in their hands. The tax relief will eventually lead to more liquidity in the hands of the buyers. Nothing could be better if the government slash the tax rates for both buyers and sellers as it will rejuvenate the market as the demand for housing and high end products is poised to rise.However, the expected rate hikes from the RBI could be a major concern to watch out for as it may push out the liquidity from the economy at a fast pace.
Siddharth Maurya, resource specialist, real-estate and fund managementReal estate is one of the key pillars of the Indian economy contributing around ~ 8% to the overall GDP. The government must acknowledge the important role played by the sector and make deep policy reforms to accelerate growth in realty demand. Currently, concession can be availed in income tax on up to 2 lakhs paid as interest on home loans. This should be revised and increased to build healthy demand in the sector. Likewise, waivers or reductions should be offered on GSTs on raw materials such as cement, steel, etc. Raw material prices are increasing and reduction in GST rates can give a lot of relief to the developer fraternity. Giving infrastructure status to the sector is also long due as it can help in building liquidity in the sector.
Ajay Sharma, MD, valuation services, Colliers IndiaReal estate sector witnessed a period of recovery which is likely to be derailed by the current pandemic wave. Given that the inflation-related risks are likely to shape the monetary policy of the central bank, an increase in US federal bank rates will accentuate cash outflow from markets and that the period of statutory concessions extended to both buyers, developers and other stakeholders in the market will lapse, the immediate focus will be on how to ensure any resultant shock will be cushioned through fiscal measures. This should be led by extending the tax concessionary benefits pertaining to affordable housing, increasing tax set-off for housing loan interest payment under sections 24, 80EE and specifically increasing the standard deduction which could increase the cash available through savings for taxpayers. These combined with more specific curative measures like long-term capital gains period be reduced for REITs and increase the total deduction available under 80C where the home loan principal repayment deduction is allowed, will increase investment into real estate.
Dhaval Ajmera, director, Ajmera Realty & InfraOver the past one and a half years, the real estate sector has seen a good turnaround. People have realized the importance of owning a house in the post covid era. While the government has supported and given few benefits like cut off on stamp duty, all time low home loan rates, the upcoming budget must continue to support real estate sector as it is a significant contributor to the GDP of the country. The real estate industry seeks continued low interest rates for next 2 to 3 years and GST on the component basis at 8%. The government should also focus on changing the definition of affordable housing. It is important to increase the interest cap to Rs. 5 lakh from Rs 2 lakh on housing loan interest rates, in order to reduce the financial burden of taxes for buyers in affordable segment. The above-mentioned factors will help to boost the economy.
Rohit Poddar, MD, Poddar Housing and DevelopmentThe Union Budget this year can play a supporting role in the real estate sector, by offering some key relaxations in taxes and waivers, reductions on GSTs on raw materials. As the sector is one of the biggest contributors to the nation’s GDP, strengthening the sector will also boost the allied economic activities, thereby bringing a positive turnout to the economy as a whole. We would expect the focus to be on providing a push to both affordable and rental housing to accommodate the rising demand in the housing sector due to the pandemic-induced change in home buying preferences. Hopefully the long due of giving the sector infrastructure status will help in building liquidity in the sector.
Siraj Saiyad, director, Arete GroupAt a time when the country is anticipating another threat due to the outbreak of the Omicron virus that may reach its peak in February as per experts, viz. Also around the time of the Union Budget, the industry looks forward to the much-needed incentives in the upcoming budget, especially as the real estate sector is the primary contributor to the uptick in the economy. The existing tax exemption on housing loans should be raised. Personal income tax could be made easier in terms of heads and filing in the budget. We also expect the budget will further focus on investments in infrastructure and capacity building.
Alain Spohr, MD, Alstom India & South AsiaRailways can prove to be one of the champion sectors to provide fillip to Make in India, incentivise foreign investments and deliver a big boost to the economy. Our expectations are in line with the priority accorded to infrastructure projects by the government such as National Infrastructure Pipeline and PM Gati Shakti. An enhanced capital outlay to encourage railway modernization plans for creation of infrastructure as well as replacing railway passenger and freight fleets would be ideal. Special emphasis on multi-modal connectivity with enhanced opportunities under PPP mode is expected to boost activity in this sector. We are expecting additional support for introduction of new technologies such as Metro Lite and Metro Neo for promoting mobility in Tier II & III cities.Introducing production linked incentives for railway manufacturers and exporters promoting Make-in-India would be encouraging while also fast-tracking the implementation of projects and supporting the manufacturing ecosystem.
Vineet Goyal, JT MD, Kohinoor GroupIt is expected from the government to address the challenges faced by the investors and developers by encouraging NBFC’s and banks to provide money for commercial real-estate projects or take over and restructure stalled projects will help in kick-starting the economy. Also, to encourage more NRI investments in the country, the government should consider measures such as a reduction in the income earned from the long-term capital gains. With the pandemic’s impact remaining far in the horizon, abundant policy support is still needed for the real estate sector to bounce back, and we are hoping that the upcoming budget will highlight that. The forthcoming budget will be crucial in terms of Government reforms, and we believe that the government will take suitable measures to encourage consumer demand.
Rakesh Reddy, director, Aparna Constructions and EstatesThe real estate sector expects Union Budget 2022 to be largely favorable for strengthening demand and improving affordability. Ample policy support is still needed for the real estate sector’s complete revival in addition the mainstay expectations of infrastructure status, availability of financing, and GST rationalization. Policies must be enacted that also expand tax deductions for home loans, decrease long-term capital gains tax for property investments, and address the scope of the affordable housing segment.Hiking the Rs 2 lakh tax deduction on housing loan interest rates to Rs 5 lakhs can boost demand for housing, especially in the affordable and mid-segment categories. Furthermore, decreasing long-term capital gains tax for real estate would incentivize property investments. Affordable housing received strong support in the last Union Budget, with the government extending the Rs 1.5 lakh tax rebate period for loans to March 31, 2022. This period can be extended further to ensure strong demand for affordable housing in the coming year.
Ashwin Reddy, MD, Aparna EnterprisesThe upcoming budget should earmark more funds towards infrastructure development. The focus on infrastructure has a positive impact not only for the building materials industry, it improves the ease of doing business for all sectors. While we strongly appreciate the continuous efforts put in by the Government to improve the world wide ranking in ease of doing business, still there is some room for improvement in it. From GST perspective, reduction of GST rate on cement from 28% to 18%, inclusion of fuels especially natural gas under GST will help the industry tremendously. Making adequate provisions in the budget for release/reimbursement of industrial incentives on timely basis will ease the working capital related issues for the industry. Additionally, the building materials sector is also very dependent on provisions made to the real estate sector. The union budget should focus on boosting demand for affordable housing. Long term funding support in case of long gestation projects, giving infrastructure tag to the real estate sector are also critical elements that can aid in boosting the sector significantly.