Budget 2018: For the economy as a whole, Budget 2018 should address the following major issues: create an environment to boost economic growth, continue the process of economic reform, attack inflation and improve the tax structure.
Budget 2018: The year 2017 was big for the Indian real estate sector when it came to changes in its regulatory framework. India is now way more appealing to both international and Indian investors. Going forward in 2018, increased consolidation and transparency which are fair results of the landmark policy changes will further incentivize them to get a foothold in the Indian real estate market.
The foremost of them, RERA, will enforce hitherto unprecedented transparency and accountability requirements for developers into the system, and do a lot to increase consumer confidence. The Goods and Services Tax (GST) will also have a major impact on how developers run their businesses. Further, the overcrowded real estate sector will witness unprecedented consolidation happening by ways of joint ventures between small developers with bigger, better-organised developers, smaller players being bought out by bigger ones.
For the economy as a whole, we expect the Budget 2018 to address the following major issues: create an environment to boost economic growth, continue the process of economic reform, attack inflation and improve the tax structure.
Here are some of the expectations of the realty sector:
1. First, and foremost, the real estate sector needs to be granted the infrastructure status in the Budget 2018 considering its role as a significant growth driver for the economy as a whole and its role as a key job creator.
2. The GST rate for property needs to be brought down from its present 12%. The tax rate is high and combined with stamp duty, it increases the cost for consumers.
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3. The Single Window System for the sector becomes imperative if the processes need to be quickened and made investor-friendly.
4. Fast track courts need to be brought in to expressly decide cases related to infrastructure development. At present, the cases drag on for years, causing huge losses to both consumers and developers.
5. Land Acquisition Bill should be amended by FM Arun Jaitley so as to bring down the cost of infrastructure development.
6. With rapid growth in urbanization, special focus needs to be given to creation & enhancement of urban infrastructure.
7. Personal Income Tax Exemption bracket needs to be increased to realistic slabs. This will increase spending power of people, which will further fuel economic growth providing flair to the realty sector as well.
8. A speedy clearance of mega projects will help in timely delivery, creating a win-win situation for all the components of the economy.
Without a doubt, the Indian realty sector deserves attention, for its health has a direct impact India’s economic health. Budget announcements create a lot of excitement in the sector. And for right reasons, they tend to increase activity in the sector, leading to additional employment generation, which is good for the economy.
(By Pankaj Bansal, Director, M3M Group)