Budget 2018: Realty experts lament exclusion of industry status

Budget 2018: Even as they lauded the Budget’s emphasis on infrastructure creation, realty industry is “highly disappointed” as the finance minister failed to grant industry status to the sector, a long-pending demand. Arun Jaitley proposed establishment of affordable housing fund in the National Housing Bank to boost the sector.

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Budget 2018: Even as they lauded the Budget's emphasis on infrastructure creation, realty industry is "highly disappointed" as the finance minister failed to grant industry status to the sector, a long-pending demand. (Image: Reuters)

Budget 2018: Even as they lauded the Budget’s emphasis on infrastructure creation, realty industry is “highly disappointed” as the finance minister failed to grant industry status to the sector, a long-pending demand. “The Budget turned out to be populist and sounded excessively cautious while the need of the hour was to provide a positive boost to the economy, which is reeling under the pressure of structural changes and policy reforms,” Anarock Property Consultants Chairman Anuj Puri said. Finance minister Arun Jaitley, in the Budget presentation, proposed establishment of affordable housing fund in the National Housing Bank to boost the sector. “Prime minister Narendra Modi’s thrust continues to be on affordable housing, but it is very clear that he has little love for rest of the housing. The announcement of affordable housing fund shows that he is moving towards the housing for all target,” Puri said. JLL India CEO and country head Ramesh Nair rued that other affordable housing fund which the finance minister spoke about, nothing was announced for the real estate sector. “There were so many demands, on MAT, infrastructure status, external commercial borrowings, among others, nothing was talked about,” he said. The government has also set a target to construct at least 31 lakh affordable homes in urban areas in 2018-2019 and 51 lakh in rural areas. “The fund will help developers in financing projects. However, clarity on single window clearance and GST was much anticipated. We also expected incentives for first time home buyers which would have helped increase demand and create equilibrium in the demand-supply gap,” Credai-MCHI president Mayur Shah said.

“Most importantly, granting industry status to the real estate sector which is one of the largest contributors to the growth of the economy was the need of the hour,” he added. Echoing similar views, PwC India partner – real estate tax Bhairav Dalal said, “affordable housing continues to get preferential treatment. Creation of the affordable housing fund will certainly ease the funding gap.” CBRE Chairman, India and South East Asia, Anshuman Magazine said, “the Budget is populist focusing on providing social security at the grass root level. It was hoped that this year’s budget would finally address the need to put in place single window clearance and accord infrastructure status to the sector, which did not happen.”

Sheth Group CMD Ashwin Sheth pointed out that the focus on the smart cities project will help in improving the standard of living for residents. “However, clarity on single window clearance and GST was much anticipated. We also expected incentives for first time home buyers which would have helped increase demand and create equilibrium in the demand-supply gap. While this budget focuses on the overall growth of the economy, we will adopt a wait-and-watch approach and hope adequate measures are taken to complement their continuous endeavours to boost the real estate sector,” he added.

The announcement of relaxation of income tax adjustment in case of difference of less than five per cent between the circle rate and consideration for real estate acquisitions to remove hardships faced by the sector was also welcomed by the industry. “However, this may not be enough as the actual deviation of circle rates to prevailing market is in many cases as high as 30 per cent, crippling transactions,” BDO India Partner, real estate Nidhi Seksaria said.

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