The Real estate sector, being the second largest employment generator in India, has several expectations from Union Budget 2019 that will be delivered by Finance Minister Nirmala Sitharaman. These include greater impetus for affordable housing and successful implementation of RERA in all states.
Director of a realty firm told a media organisation recently that the sector would want real estate industry to be granted infrastructure status which will ensure easier access to institutional credit and help in reducing developers' cost of borrowing for affordable projects, presently under tremendous pressure owing to NBFC crises.
Another expert, however, said that the sector is set to contribute close to 13 per cent of the country’s GDP going forward. She said it is imperative to address some of the gaps with key focus areas in the upcoming budget:Here are pointers to some of the sector's expectations:
1. Successful implementation of the Real Estate (Regulation & Development) Act in all states, ensuring accountability from all stakeholders concerned.
2. Public participation is key to the growth of infrastructure for future. The government should create awareness among the masses on the need for better infrastructure, even if it means the pay-to-use model.
3. Ease the liquidity crunch for making funds more accessible to home buyers and consumers, which will again boost Indian real estate sector.
4. Developers need to seek on an average of 25 approvals for each project which increases project timelines, delivery and the cost significantly. A simplified online approval process with a single window clearance will speed up the process and benefit the sector.
5. Adoption of digital technology will increase transparency and help boost the confidence of global investors in the Indian Real Estate sector. Both government and private parties need to implement the key attributes of block-chain technology to modernise real property conveyance and improve processes for recording deeds and other related instruments. Initiatives to promote artificial intelligence (AI) and technology in real estate, to achieve the ‘Housing for All’ mission.
6. Robust government mechanism to address issues such as hoarders, black marketers and sand mafia or else cartels will be detrimental to the future of the construction sector.7. Solution to funding issues:
The sector is expecting the government to ease ECB (External Commercial Borrowing) norms, to ensure steady inflow of capital from foreign investors. Similarly, the introduction of housing bonds, granting of special status to HFCs (housing finance companies), at par with the banking sector, will further help in providing the much-needed fillip to the housing segment, across all markets and geographies.
8. Affordable housing:
Experts believe investments in infrastructure development will help in increasing developers’ access to funds, for the development of affordable housing projects, in addition to initiating rental housing.
9. Tax rationalisation:
The real estate sector is expecting further relaxation in the GST rates. There is fear that if tax incentives for SEZs are withdrawn, it could severely hit the job creation ability of the sector.
10. Cross purchasing of residential and commercial properties, from sales proceeds
is also expected.
11. Infrastructure development:
The union budget should focus on a holistic plan for infrastructure and housing development, in the peripheral locations and tier-2 and tier-3 cities. A boost for infrastructure will also help other industries and create large scale employment in the economy.
12. Working with the RBI on a mechanism to immediately pass on interest rate cut benefits, to home loan borrowers.
13. Financial support and wide-scale initiatives towards skill development.
(With inputs from online media reports)