As India charts its course towards achieving the $1 trillion revenue forecast for the real estate industry in 2030 and aims for a 13% contribution to its GDP by 2025, the realty sector emerges as a crucial chapter in the country’s economic narrative. The Interim Budget 2024 has the potential to shape a resilient and bright future for the industry.
However, it’s essential to adopt a comprehensive approach that extends beyond promoting affordable housing to also addressing fundamental challenges. This includes granting ‘industry status’ and implementing a streamlined ‘single-window clearance system’.
Additionally, “in response to the recent escalation in realty prices, we propose an increase in the tax rebate on home loan interest under Section 24 of the Income Tax Act. Raising the current limit from Rs 2 lakh to Rs 4 lakh could be a game-changer, helping to sustain the current strength in demand. By creating a conducive environment for affordable housing and prioritising key reforms, we can further strengthen the real estate sector’s role in bolstering the economy. The upcoming budget presents a strategic opportunity to advance these initiatives, ensuring long-term prosperity for the real estate industry and its significant contribution to India’s economic development,” says Dhruv Agarwala, Group CEO, REA India (Housing.com, Proptiger.com and Makaan.com).
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Here’s a look at what India’s leading developers expect from the Budget:
Kalyan Chakrabarti, CEO, EMAAR India: “We are expecting a positive outlook for the real estate sector in the upcoming Interim Budget 2024-25. The sector has shown resilience with sales recovering to almost pre-COVID levels in FY 2023-24. Real estate sector’s contribution to India’s GDP is expected to ascend into double digit territory in this decade from a current level of approx. 8%. As key stakeholders in the sector, one of our primary expectations is a reduction in GST rates on construction materials to enhance affordability and make home-buying more accessible to the masses. Additionally, we seek an industry status for the real estate sector as this would be a major stride on the infrastructure front by the government. This will further enable developers to lower cost of borrowing and pass on the benefits to customers.”
Ashwinder R Singh, CEO-Residential, Bhartiya Urban: “2023 was a benchmark year for the realty sector, and 2024 will be even better. We foresee increased demand driven by the nation’s robust economic growth and the potential reduction in home loan interest rates. However, there are certain issues that, if taken care of, will take the realty sector to new heights and help the government realise its mission of housing for everyone. As a result, the real estate sector has high hopes for the forthcoming budget. Among the foremost is conferring industry status upon the real estate sector. Besides, we would also like the inclusion of crucial measures such as single window clearance, tax breaks, and GST rationalization. At the same time, the affordable housing segment needs a focused approach. There is a substantial unmet demand, but proactive government intervention is needed to lead to its growth.”
Manoj Gaur, CMD, Gaurs Group, and President CREDAI NCR: “The real estate sector has pinned high hopes on the forthcoming budget. First of all, the sector is looking for the reintroduction of the interest subvention scheme to revive mass housing. Secondly, we are also seeking a redefinition of affordable housing, and the limit for it should be raised from 90 sq mtr in terms of space and 45 lakh in case of pricing. It will be a much-needed intervention as a considerable demand exists in the affordable housing segment. And lastly, we are also looking forward to announcements on GST input credit to stimulate growth and foster a more resilient real estate environment.”
Amit Modi, Director, County Group: “One of the primary expectations from the Budget 2024 by the real estate sector is the grant of industry status. The construction industry is a significant employer, especially with a considerable portion being unskilled and casual labourers, so conferring industry status would catalyze growth. It aligns with the national vision of providing housing for all and generating employment. Anticipated measures also include implementing a single window clearance system and a focus on promoting affordable housing.”
Vidush Arya, Head-Strategy, Orris Infrastructure Pvt Ltd: “We anticipate favorable norms aimed at lowering interest rates and introducing tax rebates, encouraging sustained development and investment. Additionally, we hope for increased budget allocation towards new infrastructural developments. This dual strategic focus aligns with the positive momentum already witnessed, further elevating the quality of life for home buyers and investors.”
Prateek Mittal, ED of Sushma Group: “We believe that the forthcoming budget will include income tax benefits for our sector, with high hopes and expectations for the return of the CLSS scheme. Anticipating a stronger real estate market, we foresee fiscal support that recognizes the industry’s critical role in economic recovery. Affordable housing remains the focal point for inclusive growth, and we eagerly await government initiatives that promote and incentivize such projects. By addressing diverse housing needs, these initiatives are expected to transform the real estate landscape, contributing significantly to the nation’s social and economic fabric.”
Dinesh Gupta, Secretary, CREDAI Western UP: “This year the Union Cabinet must think of doubling the maximum deduction for home loan interest under Section 24 of the Income Tax Act. Currently it is capped at Rs 2 lakh, but as per the rising demand and diversion of funds for home buyers, the Govt must think to hike it up to Rs 4.00 lakh or so as a new limit. Also, the government should redefine the limit of affordable housing and increase the cap to Rs 1 crore and plot size to 200 sq. mt. or so due to shortage of land for affordable housing. We also anticipate that the real estate sector must get industry status to get equal benefits like any other industry and the government must consider to put real estate projects away from NCLT to save interest of all stakeholders.”
Himanshu Garg, Director, RG Group: “In order to ensure that projects do not become protractedly mired in the legal system and are built on schedule, the government must present a more comprehensive plan for stuck projects that considers alternatives to the SWAMIH Fund. Integrating project approvals and bringing them to a digital model would be a fantastic next step. To encourage home buyers to buy their properties, the government should raise the maximum amount of interest that can be waived on home loans.”
Ashok Singh Jaunapuria, MD & CEO, SS Group: “With the Indian real estate peaking in 2023, we are confident that this buoyant trend will continue well into 2024 as well in the backdrop of a healthy macroeconomic outlook, an uptick in the job market and stable lending rates. This year could be the year of reckoning if the government focuses on the affordable housing segment. Through carefully curated policy impetus, fiscal support, the government should look at giving a boost to this segment which will bridge the widening housing gap. Another important element we are seeking from the Union budget 2024 is to increase the home loan interest rebate from the existing Rs 2 lakh to Rs 5 lakh. This will attract genuine home buyers and boost demand. Finally, a single-window clearance to reduce roadblock and speed up projects together with RERA amendments will be a great boon.”
Saransh Trehan, Managing Director, Trehan Group: “The Budget 2024 is the credo guiding and incentivizing every sector of the nation’s economy. We believe that the Budget should echo the rightful expectations of the real estate sector demanding industry status recognition. It will streamline the sector’s aspirations of being at the receiving end of benefits such as getting interest subsidies and relaxations from stamp duties and other forms of tax exactions. It will help the sector bounce back and regain its momentum, boosting demand as well as sales. Additionally, the government should ratify a single window clearance system to end the proverbial chain of project delays, which has become a drag in the path of attracting new home buyers and leveling up demand. The real estate sector is also wishful of the government upshifting the home loan tax rebates with an aim to provide immunity to home buyers, which will ultimately lead to an uptick in sales and real estate demand. Special incentives and timelines should be introduced to promulgate, pace up, and speed up Infrastructural projects in Tier 2 and 3 cities to embolden buyers to invest in the thriving real estate markets brimming with superlative property options and types.”
Dushyant Singh, Director, Orion One 32: “The Union Budget 2024 should consider conferring the industry status to the real estate sector and instituting single-window clearances for projects. On one hand, the industry status will allow developers to reap the benefits of capital and interest subsidies and also avail remissions from stamp duty, tariffs, and other duties. Apart from this, single-window project clearances can to a large extent decrease delayed project timelines and ensure quick and smooth deliveries. Tax concessionary schemes should also be mulled over and brought with the objective of encouraging developers to undertake new commercial real estate initiatives and announce projects in newly developing avenues and corridors.
Shiven Vikram Bhatia, Executive Director, Splendor Group: “As the demand for office spaces soars exponentially across metropolitan cities, the Budget 2024 should reverberate the aspirations of upscaling the commercial real estate infrastructure, more particularly Grade A office infrastructure across the country. Emphasis should be given to chalking out plans to channelize ‘Make in India’ initiatives which will boost investments and embolden developers to undertake newer initiatives. Infrastructural facelifts and projects are the backbone of real estate growth. Due importance should also be accorded to improving the scope of infrastructural connectivity and variedness across cities and states to accentuate brisk economic growth in the real estate sector.”
Rohit Pandit, Managing Director, People’s University: “India’s biggest real estate success story by 2023 will be around 500,000 units sold in urban areas, showing an impressive annual growth rate of 31% as the market booms due to healthy macroeconomics, credit strong numbers, and a growing industry. With market momentum continuing to pour in, stakeholders are eagerly waiting for the much-awaited industry status for the real estate sector. This move is poised to further popularize the sector in recognition of its vital role in India’s economic growth. The current bureaucratic climate presents challenges, with the real estate industry requiring more than 30 approvals from various state and federal agencies. Addressing this requires a resonance of the single window clearance system strongly, aiming to streamline bureaucratic processes, speed up project approvals, reduce delays.”
