By: Ravi Sinha
Track2Realty Exclusive
It seems the euphoria within the realty sector over the proposed income tax exemption limit on housing loans from Rs. 1.5 lakhs to 3 lakhs has faded even before the union Budget 2012-13 is formally presented. Though the sector has welcomed the proposed exemption, it seems it is nowhere near their expectations since the wish list are too long and the pending demands do not seem to be fulfilled even with this years’ budget.
The sector is divided over the impact of tax exemption and a number of developers that Track2Realty spoke to, rather question the rationale of such a move in metro cities like Mumbai and Delhi where the average cost of a flat is in the range of 70lakh-1crore rupees. Though the proposal of this exemption was put forward by the industry body NAREDCO itself in a memorandum, many of the developers believe the move is a populist one and will help only the housing market in tier-III cities.
Ashwani Prakash, Executive Director of Paramount Group, though disagrees with this assumption and asserts that in terms of housing transactions, it is the metro cities where volume housing demand and supply is taking place. He categorically says that the need is to cure the disease and not the symptoms, and hence if accorded an industry status most of the legitimate demand and needs of the sector will itself be addressed.
“Last year, for real-estate was full of happenings. It has seen lot of ups and downs, during the year 2011 .The growth in the sector has seen steep curves. With this scenario the sector has faced great challenges to provide the products combining affordability, comfort and quality. Indian real-estate had set an example during the recession of 2008 -09, as it recovered in the shortest possible time as compared to the global real-estate sector which is still struggling to come out of the bad patch. However, the sector would require support from the government, which is expected in the coming budget. Industry status to the real estate sector is long awaited. This should be provided in the current budget, which will definitely give a boost to this industry and the benefits/facilities available to the industries at large could be utilized,” he says.
Echoing similar concerns, Anuj Kumar Choudhary, Director, Panchsheel Buildtech says the sector has recovered very well from the recession, which is remarkable. During the year 2011 there were lots of happenings which have some impact on the growth of this sector. But the sector has responded well to the demand of the customers and we have been able to full fill the expectations of the customers.
“We have a long pending demand to give Industry status to the real estate sector. We hope that this should happen in this budget which will definitely give a boost to this sector and it will help both the customers and the builders. It will also bring more transparency in the system which will help everyone at large,” he says.
…..to be continued
