For the home buyer and the real estate industry, the Budget speech by Finance Minister Piyush Goyal brings in positives.
The biggest plus point is rationalized taxation, good for both – although we will wait for the Group of Ministers (GoM) to come up with recommendations to the Goods and Services Tax (GST) Council, which will hopefully bring real estate under GST while subsuming all other taxes and levies.
I would rate the Finance Minister’s Budget Speech at 9 out of a possible 10, because he has laid out the path to a successful balancing act. He has given tax breaks, enhanced benefits while not increasing taxes – and yet, has shown a roadmap that will keep fiscal deficit in control.
National Real Estate Development Council (NAREDCO) had submitted a representation, with specific points that would benefit both home seekers and the industry. It is satisfying that the representation was taken in the right spirit and we see some of those points reflected in the Goyal's Budget speech.
The one paradigm change in real estate came in with the new regulatory regime under RERA, which got a mention from the Hon’ble Minister. He said RERA has helped in bringing transparency in real estate sector, and I concur. This transparency positively impacts both, home seekers as well as the industry.
Another point mentioned by the FM in his Budget speech was the need to move ahead, from ‘ease of doing business’ to ‘ease of living’. This not only reflects focus on nex-gen infrastructure, but also ensures that future growth will provide ‘ease of living’, while also reflecting on the modernization that the country seeks to achieve – which will obviously, provide a boost to real estate.
Goyal spoke of the Infra structure push as a result of increased spending on airports, railways etc. Like ‘electricity for all’, these will positively impact real estate. From the perspective of another segment in real estate, warehousing and logistics, these connectivity enhancements will increase demand for logistics and warehousing.
In my thought process, two things that could have also made it to the list of positives - which were missing with regards to the housing sector – were granting of industry status to real estate as a sector, not restricting it only to the affordable segment; as also section 43-C of the Income Tax Act, wherein tax is levied when prices are reduced. Also, the NBFC deadlock and stressed asset problems could have been dealt with in terms of solutions in the Budget speech.
To conclude, the one paradigm change in real estate, the new regulatory regime under RERA came in for mention from the Hon’ble Minister. He said RERA has helped in bringing transparency in real estate sector, and I concur. The Hon’ble Minister mentioned in his budget speech that India is poised to become a $5 trillion economy in 5 years and aspires to become a $10 trillion economy in the next 8 years. This will obviously augur well for real estate and we look forward to positives in days to come.
Niranjan Hiranandani is the co-founder and MD of Hiranandani Group. His newest venture is Hiranandani Communities. He is President (Nation), National Real Estate Development Council (NAREDCO), which works under the aegis of Ministry of Housing & Urban Affairs, Government of India.