The Union Budget 2011 has evoked a mixed reaction from the real estate players across the country. While the sector has favoured proposals taking care of infrastructural needs in the country and other steps enumerated in the Budget speech for boosting affordable housing, no mention of industry status for real estate has left the sector dejected.
The Emaar MGF officials believe the underlying fact that due importance will be given to infrastructure is good news for the real estate sector.
Emaar MGF Executive President Sanjiv Saddy maintained, better infrastructure would help the sector as new micro-markets would develop into sustainable urban destinations and metros will become better cities. He added, infrastructure investment is crucial since it sets the pace for the entire decade.
Tata Housing Development Company CEO and MD Brotin Banerjee feels the budget is positive.
He maintained, the government’s move to give the infrastructure sector a much needed boost by way of allowing foreign institutional investor’s to invest in infrastructure debt without a with-holding tax is a positive move. “As infrastructure improves it will improve connectivity and give a boost to affordable housing.”
The Finance Minister in his Budget speech has said, to stimulate growth in the housing sector, the existing scheme of interest subvention has been liberalized. The interest subvention of one per cent on housing loans has been extended to Rs15 lakh where the cost of the house does not exceed Rs 25 lakh from the present limit of Rs 10 lakh and Rs 20 lakh, respectively.
From a real estate perspective, the sector feels liberalizing interest subsidy for low-cost housing would expand the market for homes.
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Especially for the realtors, the e-Stamping initiative will bring in a greater amount of sanity in records for the sector.
Omaxe CMD Rohtas Goel maintained affordable housing development was expected to be encouraged with the announcement of a new Housing Mortgage Guarantee Fund which will cover the risk of Housing Finance Companies for lending to less advantaged sections of society.
Credai (Confederation of Real Estate Developers’ Association of India) Vice-President Getamber Anand maintained, another welcome step in the budget was to prevent frauds in loan cases involving multiple lending from different banks on the same immovable property, the Government has facilitated setting up of Central Electronic registry under the SARFAESI Act, 2002. This Registry will become operational by March 31, 2011.
However on the flip side realtors believe the main demands from the real estate sector was ignored in the budget b ythe Finance Minister.
Geetambar Anand maintained for a start, they would have preferred an industry status for the real estate segment which is directly linked to growth. Also the complex tax structure in our sector also has not been addressed.
Even Brotin Banerjee maintained the real estate sector would have been more contended to have got government’s notice towards the huge gap in demand and supply of mid market segment housing. “While the sector saw sincere effort from the govt. towards low cost housing, meeting up with more urgent requirements towards removing archaic laws and bringing taxation to a reasonable level would have further brought good news for both the industry and the large mid market segment of the country,” Banerjee added.