Budget 2019 India: The expectations are quite high this time as the government will present its first Budget 2019-20 after winning with a thumping majority in the Lok Sabha elections.
Union Budget 2019 India: As the government will present its first budget after winning with a thumping majority in the Lok Sabha elections, the expectations are quite high this time. After the government brought in Insolvency and Bankruptcy Code and Benami Transactions (Prohibition) Act, Real Estate (Regulation and Development) Act, Goods and Services Tax (GST), to bring in regulations in the sector as well as support on how to tackle with dwindling sales, high inventory and price stagnation, the expectations are quite high this time as the government will present its first budget after winning with a thumping majority in the Lok Sabha elections.
The real estate sector has always been one of the major contributors to the GDP growth of the country and hence the sector expects the budget to not overlook the challenges that affect the sector. A host of macroeconomic factors like economic growth, jobs, fiscal borrowings and investments in the public sector define the base of the sector. Housing for all 2022 is one of the key objectives and with favorable policy interventions by the new government, it should help in boosting the real estate sector – There are a few provisions under Section 80C that women can make good use of. The investments under Section 80C are mostly long term and come with varied returns depending on the kind of investment made. If you are a first time home buyer and have taken a loan for the same, you can take additional tax benefit of up to Rs. 50,000 under Section 80EE of the Income Tax Act, 1961. However, this is only applicable if the loan is sanctioned between April 1, 2016 and March 31, 2017.
The changes that the real estate sector is rooting for:-
a) Increasing funding for the real estate sector
As the realty sector fights liquidity crisis, funding by the government to the NBFC’s must be given serious attention. Alongside this, the government should also make amendments for banks to fund developers as severe fund crunch is resulting to significant project delays. Additionally, banks should fund stalled projects and also procure lands for the “Affordable Housing” initiative.
b) Providing tax benefits to homebuyers
The last interim budget announced in February did try to get the investors it lost back into the market again but however there is still need for more benefits in the market to support investors and homebuyers by reducing the tax slabs, higher relief rates on housing loans and so on.
c) To reinstall ITC benefits
“It is crucial to get back tax credit” said every real estate developer. Without the ITC benefits, the developers are feeling the drop in their profits. If this continues, property prices will rise, which will eventually result in high expenditure from the buyers. If the ITC tax is maintained it will help boost revenue in the system.
d) To acquire Industry status
As the real estate sector is one of the highest contributors to the GDP of the country, the government still does not recognise it. Gaining industry status will enable developers to raise funds on lower rates which will help increase development in the country.
e) Encourage cross border investments
The sector is looking forward to the government to grant foreign investments as this move could prove to the mist significant economic policy decision taken by the government as this will continue the inflow of currency in the county.
During its last term, the incentives and schemes introduced were necessary for the housing sector. Hence, as the new finance minister steps in this year, she must also continue with the slew of measures to incentivize homebuyers as well as boost confidence among investors for the sector.
(By Manju Yagnik, Vice Chairperson, Nahar Group and Vice President NAREDCO Maharashtra)