Ramesh Nair- former CEO of JLL India | Square Yards | MaxVIL |

Positives for the real estate sector include extension of INR 1.5 lakh additional deduction by 1 more year for affordable housing, tax holiday for affordable housing extended by one more year and new tax incentives for affordable rental housing for migrant workers. The creation of a professionally run development financing institution and the creation of an asset reconstruction company for stressed assets will also have spill over benefits for the real estate sector. The government's new divestment targets and the announcement that divestments already announced to be completed by 2022 will also help the sector as prime real estate owned by the public sector will come into the market for development. No new tax burden including covid tax, wealth tax and no hike in corporate and personal income tax were again welcome moves. 

Negatives include no mention of allowing 100% FDI in completed residential projects, no announcement of more funds under SWAMIH, no concrete steps to increase disposable income of homebuyers, no mention of setting up of a single window clearance system for approvals, not allowing GST input tax credit for under construction projects, no reduction in GST on building materials, not incentivising state governments to rationalise stamp duty and no concrete announcement with regards to making more credit available for the real estate sector. Also the industry was expecting more concrete announcements to promote foreign investments, boost domestic spending, boost job creation and increased disposable income.

Piyush Bothra, CFO, Square Yards

As far as the real estate sector is concerned, clearly the government’s focus in Budget 2021 has been on ensuring increased liquidity for all stakeholders in the short and long term. Budget 2021 again highlighted the government’s resolve towards promoting ‘housing for all’. Measures such as the one-year extension of the Rs 1.5 lakh deduction on payment of interest for affordable housing and on the tax holiday for affordable projects brings in much needed relief for the buyers as well as the developers.  

Further, announcement of the setting up of a Development Finance Institution (DFI) with an allocation of Rs 20,000 Crore is commendable. This will again strengthen the flow of funds to the cash strapped real estate and infrastructure sectors.

It can be easily said that the Budget was a representation of the inherent resilience shown by the Indian economy at the hands of adversity and showcased the government’s strong resolve to pull the economy back on its foot.

Sahil Vachani, MD & CEO, Max Ventures & Industries (MaxVIL)

The decision of not to deduct TDS on REITs and InVITs is a welcome move for the real estate industry, particularly the commercial category. It will help attract investment in commercial real estate assets and thereby will help boost the demand for A-grade office spaces across the country especially in the bigger cities, which are hubs of employment activities.

Overall the thrust of the budget for 2021-22 is clearly on boosting healthcare, infrastructure and reforming financial sector. The decision to set up a Development Finance Institution to enhance infrastructure funding, increasing FDI limit in insurance to 74% and setting up of an ARC cum AMC for bad loans along with decision to privatize couple of public sector banks are welcome moves. These measures will help in augmenting fund flow to the economy as whole.