By Shrinivas Rao
The Union budget to be presented on February 1 holds much significance, especially this being a run-up to the electoral year in 2024. While the budget is expected to focus more on issues that are tuned towards assuaging voters, there are a host of industry matters that need timely attention from the government in order to accelerate the pace of growth post the pandemic. The wish list of the real estate sector has remained much the same in the past few years, with the long-standing demand of allocating infrastructure status to the industry, tax breaks, and provision for a single-window clearance being some of the key expectations.
Besides, with the cost of construction assuming significant proportions in the last few years, a reduction in GST of input materials is widely anticipated by the industry stakeholders as it would greatly benefit the supply side. Expectations also abound regarding higher tax deductions for homebuyers in order to provide continued impetus to the residential market. Raising the INR 2 lakh tax rebate on housing loan interest rates to at least INR 5 lakh would generate healthier housing demand, most notably in the affordable and mid-income housing segment.
Also, a further hike in repo rate should be reconsidered to avert dampening homebuyers’ sentiments while the provision of additional funds put under the stress fund SWAMIH would imply improved market traction, leading to more stuck projects seeing completion.
The industry also expects to see the rationalization of capital gains tax, the rate reduced from the existing 20%, as well as the removal of the INR 2 crore cap on capital gains for reinvesting in two properties. Finally, with India committing to net zero carbon emissions by 2070, we expect the budget to initiate structured plans for sustainable development in the industry.
(Shrinivas Rao, CEO, Vestian. The views expressed in the article are of the author and do not reflect the official position or policy of FinancialExpress.com.)