Budget Reactions Window dressing
Non-event for real estate sector
W Pradeep Jain, Chairman, Parsvnath Developers
Kailash Gahlot, Director, Brisk Infrastructure & Developers
hile the Budget 2012 gave the FM many opportunities to boost
the real estate sector, it has been largely a non-event for our industry. The residential seg- ment at least could have been addressed in a more dynamic manner given that housing with a shortage of almost 30 million homes in India , remains one of the primary needs of the nation, besides of course having a strong emotional quotient for every Indian. And while the residential segment has managed to sustain itself due to the demands of 1.3 billion people, giving industry status to real estate would have not only elevated this primary sector but also given a boost to industrial output, which has been languishing for some time now.
T
hough, at first impression they look beneficial for the real estate segment but on
overall basis these are just last minute window dressing.
He has proposed allowing ECB for low cost housing and exten- sion of interest subvention by one year on loan up to Rs 15 lakh on property cost up to Rs 25 lakhs. He has also proposed to decrease the withholding tax on affordable housing from 20% to 5%. Had he addressed our demand of bringing affordable housing under priority lending, it would have solved both the concerns i.e. shortage of capital as well as cost of capital for af- fordable housing.
Further, we demanded tax rebate under Section 80 IB (10) and also extension of comple- tion period for the projects approved after 1st day of April 2005 by two years as the eco- nomic slowdown hit almost all the projects launched during that period. There is no word on the same in the Union Budget. Our long pending demand of an infrastructure status to the real estate sector has also been turned down.
Moreover, application of TDS on the purchase and sale of prop- erty and increasing Service Tax by 2% will further add on to the overall cost of property and are bound to make property more costly in coming days. Therefore, I would say that there is nothing to cheer about in Union Budget rather it is a matter of concern for developers and buyers as a whole. It is actually a very disap- pointing budget and we hope that the Finance Minister will pay a more focused attention to ground realities of the real estate sector during post budget proceedings.
Anshuman Magazine CMD, CBRE South Asia Pvt Ltd
“This budget was as per expectations which were low. No bold eco- nomic announcements were made which is the need of the hour.” Increasing the tax exemption limit on home loan interest and FDI in retail as well as further FDI reforms in real estate were items that Mukherjee could have considered.
GIREM 101 17
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