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Budget Reactions

Nothing much to cheer about

Industry status must

Anuj Puri, Chairman & Country Head, Jones Lang LaSalle , India

this move could also result in a lowering of sales volumes on the secondary sale market.

The increase in the service tax rate from 10% to 12% will in- crease the cost of production for developers, who are already reeling under high input costs. It follows that this increased burden will be passed on to end users.


ur reaction to Union Budget 2012-13 is mixed at best. It seems fair to

state that the Indian real estate sector does not have much to cheer about.

To begin with, it is difficult to see the raising of the personal income tax exemption limit from Rs 1.8 lakh to Rs. 2 lakh as anything more than tokenism. It is cer- tainly not relevant for the aspiring Indian middle-class home buyer. The expected exemption limit of Rs. 3 lakh would have had some significance. That said, the 1% tax rebate for home loans of upto Rs.15 lakh on homes costing upto Rs. 25 lakh will prove beneficial for developers in this segment.

Exempting proceeds from the sale of a residential property from Capital Gains tax if they are invested in equity or equipment of an SME definitely provides home owners with more reinvest- ment options. Previously, the only route for exemption was pur- chase of another property or tax saving bonds. At the same time,

16 GIREM 101

Allowing External Commercial Borrowing (ECB) for affordable housing is, without doubt, an ex- cellent move. It will ensure better capital availability for developers of low-cost housing. This sector is typified by low margins, and it becomes attractive only if de- velopers are enabled to produce greater volumes. Better capital availability will help in timely pro- ject execution, which will result in higher volumes.

The postponement of a firm deci- sion on FDI in multi-brand retail came as a disappointment. We seem to have missed yet another opportunity to boost the Indian economy by ways of significant foreign capital inflows. On the other hand, the increased spend on warehousing will certainly help the retail real estate sector, since more storage capabilities will help retailers to expand into more cit- ies and towns.

Likewise, the measures to in- crease funding for highways and other infrastructure will help put more territories on the real estate map.

Col.R.S.Sodhi, Managing Direc- tor, Alpha G:Corp


he real estate sector, which is among the highest em- ployment generators and

affects every segment of India’s population, has repeatedly been asking for Industry status. If that is finally facilitated now, it will not only give a much-needed boost to better real estate de- velopment in the country and to the realization of the general population’s aspirations of own- ing property, but also sizably augment the collective industrial output of the nation.

Sailesh Gupta COO, Lotus Infra Projects Pvt. Ltd


othing concrete has been done to make this sector attractive for investment

which is critical to creating more jobs because real estate sector is the largest employer in the country after the agriculture sector. The budget has failed to meet the aspirations of the real estate sector.

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