The interim budget was more or less a vote bank-facing exercise — an electoral pitch that drew attention to past achievements. Vote-bank directed announcements included benefits to 12-crore small farmers via credit of INR 6k/year directly into their bank accounts, and also to 10 crore labourers by way of direct pension bonanza.
Direct and indirect positives for the real estate sector
On the Downside:
All in all, this was a balanced budget for real estate, even though it was clearly configured as a crowd-pleasing electoral pitch with a cursory nod towards the ongoing challenges in the economy.
For the housing sector to regain significant momentum, the real need is to woo back the long-term investors who exited the residential market. One possible way was to re-introduce the home loan benefit on second homes. The Government's move on this front is certainly welcome.
In mature markets, long-term investors keep the equity flow intact, and Indian real estate needs to have equity inflow rather than relying on debt. Equity can come through long-term investors and private equity or institutional players.
Definitely, no single Union Budget has ever actually come to the rescue of the real estate industry. Any incumbent Government perpetually walks a perpetual tightrope stretched between the expectations of various industries and compelling economic prerogatives. Also, there are always areas for which there are no quick fixes possible at all.
Anuj Puri is the chairman of Anarock Property Consultants.
First Published: IST