By Sunny Katyal
Indian Union Budget 2021-22: The Union Budget 2021 is one of the most awaited budgets in the history of Indian economy. While just about every spending budget is about bringing reforms and measures to boost the financial progress of the nation this spending budget is more about bringing the economy back to track.
Real estate is one of the most essential sectors of the Indian economy. It is an active contributor to the economy becoming one of the largest employment generators of the nation. The sector’s contribution to the economy, post COVID 19 has also been pretty substantial. Industry developers and consultants have tirelessly worked on creating schemes and provides all through 2020 to hold the small business rolling in the sector. “Once in lifetime” provides have been supplied to construct and sustain customer interest, which gave a enormous push to the sector in spite of the attempting instances.
The sector expects continual assistance from the government for policies and money flows which is strongly needed for its functioning. Below are some of the expectations from the government for Budget 2021.
Bring back the Input Tax Credit: The government really should look at bringing back input tax credit as developers have to spend GST on several goods and services throughout the building of projects. Input tax credit will aid in bringing down the expense of building, which in turn will aid in lowering value of properties. It can be one of the top components for boosting demand in the sector..
Tax relief for the shoppers: Consumer demand is one of the crucial push components in the true estate marketplace. Especially post COVID it is customer demand which keeps the small business rolling. Housing true estate will be in a position to sustain the momentum only when customer demand is in a sustained mode. Hence, greater tax relief for house purchasers really should be looked into for this spending budget. Cap of INR 2 lakh on housing loan interest, really should be elevated to INR 4 lakhs. Affordability on house obtaining has usually been one of the main issues for true estate some tax relief will enhance customer sentiments and drive more demand.
Relaxation in fundraising norms: The sector requirements liquidity for superior functioning and timely deliveries. Due to lack of liquidity, true estate is facing a lot of challenges like delayed projects, unsold inventories and higher project expenses. The government really should look at incentivizing the true estate private players and also look at relaxation of fund raising norms.
Funding assistance for mid-earnings projects: COVID 19 has badly impacted the smaller sized developers, particularly in Tier 2 & 3 cities. These developers are continuing to face substantial money flows which is affecting their projects. If the government can set up final-minute funding assistance for economical and mid-earnings projects, the little-time developers can avail the funds to assure that there is no additional delay in stalled projects. This can also lead to elevated demand for such projects as incomplete projects are one of the key factors for the slowdown in customer demand in this segment.
Budget for 2021 is essential for true estate a lot of small business improvement would rely on what positive measures and policy reforms are taken by the government. The complete sector is eagerly waiting with watchful eyes for the announcement for the considerably-necessary reforms and incentives, genuinely needed to enhance this sector.
(Sunny Katyal is Co-Founder of Investors Clinic. Views expressed are the author’s personal.)