Mr. Nitin Kansal, CFO, Max Estates Ltd.:
We would hope that the upcoming union budget would act as an enabler by accepting the long-standing demand of the commercial real estate sector to receive an input tax credit on GST collected from customers on rentals for built-to-lease properties. This shift would not only boost the CRE business, but would also prove beneficial for various other businesses like retail, hospitality & hotels, malls etc.
From a residential real estate lens, a few key relaxations like an increase in tax rebates on interest on housing loans and serious relook of the definition of ‘affordable’ both from the value of the house as well as its size will provide a much-needed boost to the sector. Another area that the union budget should look at is policies that will help soften the prices of input costs to aid further improvement of the affordability index.
The real estate sector is the second-highest employment generator in India. The industry is expected to reach a market size of $1 trillion by 2030, while contributing around 13% to the GDP of the economy by 2025. These positive changes in policies will provide a boost to the sector and enable strong developers to create quality spaces and value for the economy.
Mr. R K Arora, Chairman, Supertech Ltd
The recent debt crisis in some of the large NBFCs has hurt the real estate sector, which was already grappling with a liquidity crunch. The government has been proactive in resolving the issues pertaining to different segments of the economy, including the real estate sector.
However, the liquidity crunch is a serious problem for the realtors, especially the smaller developers. We urge Finance Minister Nirmala Sitharaman to help in mitigating the funding issues for the sector. Giving 'industry status' to the real estate sector could be a small step in this direction. Last mile funding is also required to complete the ongoing projects, so the government should also issue guidelines to existing lenders directing them to provide last mile funding.
For the home buyers, the government should increase the tax incentives on home loans. Amid the scare of this fast spreading Omicron, any additional fiscal incentive to the first-time homebuyers will go a long way in further boosting the demand which has started looking up.
Mr. Saransh Trehan, Managing Director, Trehan Group
The government should come out with measures to incentivise developers for building townships in smaller towns and cities. Well planned townships will go a long way in improving the standard of people in such areas.
The definition of affordable housing needs to be changed as it is nearly impossible to own a decent apartment under Rs 45 lakh in major cities. The Rs 45 lakh ceiling needs to be enhanced significantly to ensure housing-for-all a reality in a shorter time.
Suren Goyal, Partner, RPS Group
The current ceiling of Rs 45 lakh for classifying as affordable housing needs to be looked into. It should be enhanced to Rs 75 lakh at least. Also, the building raw material cost has gone up significantly in the last few years, particularly since the Covid outbreak. The Hon'ble Finance Minister needs to announce some measures to cool off raw material prices and lowering taxation on these should be considered in the upcoming budget, at least in the short run.
In the last Union Budget, the government did provide incentives for affordable and rental housing by extending the additional deduction of Rs 1.5 lakh for loans taken by March 2022. We are expecting the government to extend the scheme and enhance the additional deduction of Rs 2.5 lakh as it will provide a further fillip to the affordable as well as mid housing segment.
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