I would say I am relatively dissatisfied with the focus of budget on realty sector in the last ten years. Our expectations have never been fulfilled and I now demand investments in infrastructure sector should be set as a priority, as good infrastructure is very necessary for the economic growth of the country. Government should simplify tax procedures as this will simplify transaction costs like stamp duty and give developers a set – off or credit on the taxes paid on construction and material services.
Government should come up with more projects on public private partnership basis. Suitable legal and regulatory framework should be established for encouraging PPP and the inflow of FDI in Infrastructure sector. Tax exemptions to developers who are into mid segment and low segment housing projects as this will lead to more developers coming into this segment and will ultimately help to cater to the increasing housing demand.
The problem is that the Finance Minister has not consulted the sector representatives about our wish list and we could not meet him for the same. I am not sure how much is he receptive about the sectors issues and concerns. With this background there is a moderate chance of the budget offering something substantial to the realty sector. We continue to remain under represented in successive budget.
This sector is deliberately getting a raw deal in Union budget as we can take the following points from last Union Budget: The hike in excise duty on cement, steel and other inputs has adversely effected the industry when it was on its recovery path, and bringing rental of vacant land into service tax as well as other changes in service tax.
I must say that to a large extent the sector too has failed to make a consensus over its legitimate expectations from the budget. The fact that real estate being a state subject makes it neglected in the budget. While I agree with the government’s stand of the sector organizing itself to be given adequate representation in the budget, they have to understand that the nature of our business itself is much disorganized at this point of time.
I have a few suggestions for better representation of realty sector in the budget. Investments in infrastructure sector should be set as a priority, as good infrastructure is very necessary for the economic growth of the country. Special Residential Zones (SRZs) should be implemented, and developers who focus on mid income housing either through SRZs or otherwise should be given more sops. Boosting of supply in all industries – In order to maintain growth rates and reduce high inflation levels there should be a boost in supply in all industries through incentivisation of infrastructure development, streamlining of regulatory process to reduce time and costs for mid income housing.
