Budget 2018 and the Real Estate Industry!
One good look at the highlights of the Union budget 2018, we can realize that the privilege has completely been given to the farmers and for the development of the rural sector. The fiscal deficit target for the year has been revised from 3 to 3.3 percent from the previous year. And for building up a ‘New India 2022’, even this target is considered as ambitious.
Real estate industry is considered as a major contributor to the revenue, thereby supporting the economy. It has been supporting the government and the economy both directly as well as indirectly. But still, it hasn’t yet reached the status of a real ‘industry’, which is still a sad story. India’s Real Estate Industry was undergoing many challenges despite the government’s efforts to resuscitate it. The government has taken initiatives to revive the real estate industry by introducing the Real Estate (Regulation and Development) Act, 2016 (RERA), the introduction of Real Estate Investment Trusts (REITs) and the concepts of affordable housing in the previous years. But as we dig deeper into the real facts and analyze the real challenges, we can see that none of these has been supporting the industry and the realtors in the way they wanted it to be.
Expectations Vs Reality!
The Growth of Real Estate Has Decelerated in The Last Three Years From 7.5% In 2013-14 To 6.6% In 2014-15 And Further To 4.4% In 2015-16. In its constant efforts to be the world’s third-largest real estate industry, the Indian Real Estate industry was hoping much from the 2018 union budget. Highlighting few points:
1. To strengthen the infrastructure that could support consistent real estate growth in the long term.
2. Stamp duty should be subsumed under the GST.
3. More tax incentives for home buyers.
4. Doubling of the tax benefit available for first-time home buyers from the current level of Rs. 50,000.
5. Granting of industry status to the entire real estate sector
What’s in store for the Real Estate India?
The term ‘Affordable Housing’ is familiar to almost every one of us. An initiative was taken by Prime Minister Narendra Modi, in Pradhan Mantri Awas Yojana in which affordable housing will be provided to the urban poor. The concept of affordable homes was getting widespread public attention and now with the new budget, it looks like a good promise as well.
By the ‘Housing for all by 2022′, the government wants to deliver 10 million houses. Out of 10 million, 95% of the houses are to be constructed for Economically Weaker Sections (EWS) and Low-Income Groups (LIG). As the affordability of this segment and the house value is low, the impact of slightest upward cost pressure is magnified and becomes a deal breaker. The real estate industry welcomes the concept of an ‘affordable housing’ as the government continues to boost the affordable housing sector by setting up an affordable housing fund under the umbrella of the Pradhan Mantri Aawas Yojna, which will give impetus to the growth of industries ancillary to the real estate sector.The Affordable Housing Fund is expected to bring few major real estate companies delve into the affordable housing segment as a viable business opportunity.Arun Jaitley said, “My Government will also establish a dedicated Affordable Housing Fund (AHF) in National Housing Bank, funded from priority sector lending shortfall and fully serviced bonds authorized by the Government of India.”
With the right changes, the real estate industry is expected to boom with flying colors in the coming years.
SOURCES AVAILED: housing.com