'Budget must focus on strengthening realty sector'

By Lindsay Bernard Rodrigues

The real estate sector, which is one of the major contributors to India’s GDP, has undergone significant changes in the last few years making it more transparent and credible. A series of key decisions taken by the government to revive the realty sector has improved consumer confidence and the impetus given to the residential sector is expected to yield positive results in the near future. These reforms will also be instrumental in attracting investors, institutions and private capital players into India's real-estate market.

Some of the aspects that the government needs to take into consideration in the upcoming budget are granting of industry status to the overall real estate sector, implementation of single window clearance and revision of the income tax slab to boost demand and open up more financial options for developers. Housing loan interest rates also need to be reduced to push demand and sales. A key expectation is the restoration of income tax benefit on a second home which will benefit home buyers in a big way and also stimulate the real estate sector. It is also important that the rental housing be incentivised to address the shortage concern. There is also a need to abolish stamp duty or merge it with existing GST rates to cut costs for consumers and also offer personal tax relief. We also expect the implementation of land reforms and greater liquidity to NBFCs in the market, which will prompt more investors to come in. Overall, we hope the government takes measures that strengthen the real estate sector and affirms robust infrastructure growth.

In 2020, we expect to reap the benefits of initiatives taken by the government that would lead to a revival and growth in the sector. More private investments will come in, and consolidation, mergers within the space are likely to continue. The year 2020 will see the industry grow in terms of newer policies aimed at improving buyer sentiments.

In conclusion, we hope the government takes more developers and investor-friendly initiatives for the betterment of the real estate market. Additionally, a seamless approval process is essential as it could help in faster execution of infrastructure and real estate projects. Overall, the Budget, through its policies, should aim at creating a positive environment in the real estate sector for both the homebuyers and the developers.

(The author is Director at Bennet & Bernard Group)