Budget 2020 Expectations for Real Estate: Now that the consumer sentiments have improved and the market is heading towards revival, the real estate sector needs some push from the FM.
Budget 2020 Expectations for Real Estate: The Union Budget 2020 is going to be presented soon and with this, all the sectors and industries are hoping that Finance Minister Nirmala Sitharaman must do something for them. The real estate sector, being a significant contributor to the country’s GDP, is hopeful that it will continue to be at the centre stage as the government focuses on changing the country’s economic scenario. As the Budget Day is drawing close, there are expectations from the government to take favorable measures for the sector.
Now that the consumer sentiments have improved and the market is heading towards revival, the sector needs some push from the FM. Lack of construction finance often becomes a cause for delay of projects, affecting the market sentiments. In such times, easing liquidity should be a necessary step taken by the government, which would increase the capital flow for developers. It is expected that the RBI will take measures to improve credit offtake from banks to help east the pressure on developers post the NBFC crisis.
The blockages in infrastructural development are a big challenge for the real estate sector, which needs quick attention. Land acquisition has been another challenge for the realty sector. It takes years to transfer land from one party to another, and the outdated land records system makes it more complex.
There is widespread hope that the budget would implement land reform to make the process smooth. Implementing UID for land would bring better clarity in the process and aid positively in the timely completion of projects.
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Getting the nod to start the construction of a project is a tedious process currently. The prevailing multiple clearance system takes time as well as cost, ultimately making the consumers suffer. Realtors hope that the budget may make provisions for a single-window clearance system to fasten the construction of projects. Dropping the circle rate from the Income Tax Act and tax rationalization on REITs will also affect the sector positively by giving a boost to commercial real estate.
The government has ambitious goals for the country’s economy. Recently, it announced its vision to make India a $5-trillion economy. Initiatives like the Pradhanmantri Aawas Yojna, with its target to deliver 20 million homes by 2022, make the sector hopeful about the upcoming budget and the growth prospects of this sector.
(By Ravish Kapoor, Managing Director, Elan Group)