Interim budget disappoints realty

Shockingly, the critical area of the PM - ‘housing for all by 2022’ has not been seriously addressed except for some ‘tinkering’. The real estate sector contributing 10-12% of GDP, which supports 200 ancillary industries, employs the highest workforce next only to agriculture sector has been ‘orphaned’ in the budget.

Infrastructure status to the ‘real estate sector’ was most expected as a natural corollary to Infra status to “affordable housing” granted in the last budget, as it acts complementary, the yielding multiplier effect on housing.

Unfortunately, not accorded. This will further aggravate the burgeoning inventory of unsold housing stock of more than 6 lakh units, requiring 2 years to liquidate.

This will further lead to builders not taking up affordable housing projects in spite of tax benefits and their loans from banks/ HFCs turning into NPAs. As a palliative measure, the FM has extended the implementation of payment of notional rent of unsold inventory from 1 year to 2 years, from the end of the year in which the project is completed. IT benefits under Section 80-1B(10) has been extended to the builders by one more year - entitled to claim 100% deduction of the profit from affordable housing projects completed in the previous year.

(The writer is a Bengaluru-based banker)