Union Budget 2019 India: With the Modi Government back in action, there is a fresh lease of hope amongst all the sectors. The reforms which were done in the last five years have positively added momentum to the Indian Economy. Now, as the re-elected government and newly appointed Finance Minister is all set to present their first budget on July 5, there has been very high trepidation across all the sectors especially Real estate.
In the last five years, the Indian realty sector has undergone a huge transformation. From being an un-organized, financially stressed sector to a much-organized, transparent and buyers-friendly one, today the implementation of stern policies and reforms by the government has revolutionized the sector like never before.
The interim Budget which was presented in February has wooed back investors and buyers by offering them attractive sops but, there are still many areas left to look upon. With real estate being one of the major contributors towards Indian GDP growth, it is important for the Government to look after these shortcomings so that the transformation which took place in last five years can replete this sector.
RERA, GST, and affordable housing have already added feathers to the market. It has not only improved the buyer’s confidence but has also added remarkable numbers. So, going forward, this time the Central Government’s budget must fulfill the age-old demand for industry status that will help developers in getting loans to construct residential units. The demand for single window clearance for all the real estate projects is also continued in the list from many years. This will, in turn, help the sector in recovering from a liquidity crunch.
The chocking liquidity is perhaps the major reason that is hindering a smooth and steady growth for this sector. Here, the Government can announce an increase in the limit of financial funding by banks and NBFCs. This will help in vitalizing the sector to a great extent.
Recently, the GST council has simplified the norms on the usage on Input Tax Credit (ITC) on the under-construction properties. The move has been welcomed but the complete reinstatement of ITC will help the developers to come out of their ongoing financial burdens and stress. On the other hand, it will also help in boosting sales as the benefits will be eventually passed on to the homebuyers only.
Talking in context to Homebuyers, the recent cut in repo rate has further raised fresh hopes among them. The homebuyers can now relieve themselves from paying higher loan EMIs as well as boost their confidence too. Moving forward in this direction, the Government can announce more tax benefits under Section 80C as well as can bring some change in the income tax slab also. This will increase the number of prospective homebuyers as it will raise the buying confidence among them.
A pragmatic approach towards ‘Housing for all by 2022’ will further increase sales and help in nurturing the sector more.
In the commercial sector, REITs have already broken many records adding new dimensions to it. It has not only fueled up the cash-starved market but has also promptly increased the flow of institutional funds in the commercial sector. Besides a few shortcomings, the investment tool is an asset for the whole real estate market of India. The Government may announce some positive reforms in this segment too.
As mentioned above, real estate acts as a major growth driver for the Indian economy. In order to strengthen it more, the government must announce encouraging moves as well as infrastructural developments that can further attract foreign investments into the sector and help in huge employment generation.