Mixed Bag for Realty: Boman R Irani, CMD, Rustomjee Group

For the Union Budget 2011-12, rising inflation, tight liquidity, high interest rate, industrial slowdown, delayed reforms and negative market sentiment were some of the key concerns to address.

I’d say that for the Indian Real Estate Sector, the Budget has been a mixed bag. The Finance Minister Mr. Pranab Mukherjee has taken certain steps for the real estate sector like increase in the interest rate subvention of 1% for housing up to Rs 15 lakh from the present limit of Rs 10 lakh. The priority sector home lending from Rs 20 lakh to Rs 25 lakh is another positive move.

However, the real estate sector has quite a lot of reasons to be disappointed with the budget.

• The Budget did very less to give impetus to “Homes for All” which has been recognized as the need of the hour by every one including the Finance Minister himself.
• The real estate sector still doesn’t get the industry status. This could have made bank financing easier and cheaper for the sector.
• The taxation worries for the sector still remain. Specifically, one of the long standing demands of the industry has been a significant reduction in stamp duties on real estate transactions. The concerns of the industry, particularly on the interplay of GST and local levies are still not addressed. So things remain at status quo.
• Several key issues like rising cost of raw material and elimination of service tax on housing are burning issues and must have been taken care of in this Budget.
• We were also expecting the income-tax exemption limit on loans to be raised, but that has not happened.