Real Estate Developers Across India Hail Union Budget Provisions
The Union Budget 2019-20 announcements have been lauded by the real estate developers spread across the country who think there will be all-round development of the industry. Although there have been some hits and misses by the Finance Minister Nirmala Sitharaman, the announcements do have the potential to bring back the industry on its feet. Here is what they have to say:
Sanjay Dutt, MD & CEO, Tata Realty & Infrastructure Limited
The 2019 Budget has come as a mixed bag for the real estate sector at a time when the industry is showing signs of revival. The government introduced schemes such as 'Bharatmala', 'Sagarmala' and UDAN have helped in improving the country’s infrastructure. Additionally, the availability of land belonging to CPSEs and central ministries to public infrastructure and affordable housing is expected to provide the much-needed impetus to the housing demand.
The allowance of FIIs and FPIs to subscribe to REITs and INVITs would lead to an influx of investment in the cash strapped sector. The government’s assurance to provide one-time credit guarantee for the first loss up to 10% for purchase of high rates pooled assets of financially sound NBFCs will further help the cause.
Abhishek Lodha, Managing Director & CEO - Lodha Group
The budget announcement by the government is optimistic towards real estate sector since it will boost infrastructure and connectivity. The government’s move on building 1.95 crore affordable houses under the PMAY scheme will be beneficial to home buyers and developers who have invested in the segment. The tenancy law will ease out the process of renting which in turn will bring transparency during the agreement. Moreover, RBI will now regulate the housing finance companies which will lead to efficient regulation of the housing sector.
Ashish R. Puravankara, Managing Director, Puravankara Ltd.
With the Union Budget 2019, it appears that the government is steadfast on its ‘Housing for all’ goal. There are multiple initiatives that will bode well for the economy and the real estate sector such as INR 100 lakh crore investment in infrastructure and the continued focus on affordable housing. All of this could potentially have a domino effect on job creation, which is one of the pressing issues for the nation at the moment. The proposal to get RBI as a regulating authority of housing finance sector should improve the governance and also the announcement that the uniform rental law is being reviewed is another welcome move.
Gaurav Gupta, Director Omkar Realtors & Developers
The first Union Budget announced under the re-elected government was inclined and focused towards affordable housing. Additional exemption in income tax on home loans under affordable housing by 1.5 lakhs for homes upto 45 lakhs is a good step by the Government. This will encourage more and more fence sitters and first-time home buyers to take quick decisions regarding property purchase. It’s a welcome move and we are hopeful that the customers and investors will show interest in the affordable housing sector. This move is expected to result in some momentum in the beleaguered real estate sector.
Srinivasan Gopalan, CEO, Ozone Group
Rs 1 lakh crore worth relaxation to the NBFCs is a quick corrective remedy to pump in enough liquidity. The move will help the NBFCs to overcome the current crisis and will bring much-needed relief to the real estate sector as the liquidity crunch issue will be addressed. This will bring more funds into the sector resulting in faster completion and timely delivery of the projects. This, in turn, will lift buyers and investors sentiments in the sector.
Tushad Dubash, Director, Duville Estates
This Union Budget 2019-20 will ensure the all-round growth of the economy and boost the nation’s GDP. The government’s proposition on several reforms for rental housing will benefit tenants and owners alike. The modern tenancy reform will help reduce reluctance to rent, enhance the supply of rental homes allowing transparency during the agreement.
Kalpesh Mehta, Founder, Tribeca Developers
The Union Budget has signaled some positive movement for the real estate sector in India. The pool purchase programme will push banks to buy assets from NBFC's which is extremely good news to restore liquidity in the sector. That, combined with the finance ministry's Rs 70,000 crores capital infusion plan will increase the lending power of PSU banks. With the growth of rental housing in India which is highly unorganized in the country, the implementation of Modern Tenancy Law is the need of the hour.
Sarojini Ahuja - VP, Sales & Marketing, Transcon Triumph
The decision to allow foreign institutional investors to subscribe to REITS and INVITs is also a welcome move. The Government has also proposed to relax local sourcing norms for FDI. FDI in real estate will provide a significant boost to the sector in terms of greater foreign capital inflows thus creating more job opportunities and revitalizing the growth of the realty sector.
Madhusudhan G., Chairman and MD, Sumadhura Group
The Union Budget successfully portrayed the government’s continued efforts to achieve ‘housing for all’ by 2022 with over 80 lakh houses being sanctioned under this initiative. The additional tax deductions on home loans for self-occupied house owners and tax reliefs on interest paid are an incentive enough to boost up sales in the affordable sector. The proposed Model Tenancy Law aims at bringing momentum in the rental-housing sector.
Bijay Agarwal, Managing Director, Salarpuria Sattva
The budget proposal of investing Rs 100 crore for infrastructure will be a boost to the industry which is looking at development in most cities. With the government allowing foreign institutional investors(FII) and foreign portfolio investments(FPI) to capitalize on their debt papers with a one-time, partial credit of Rs 1 lakh crore to public sector banks for the acquisition of high-rated NBFC assets will be a positive step in resolving the liquidity crisis faced by NBFC’s.
Uddhav Poddar, Director & CEO, Bhumika Group
The 1st budget of Modi 2.0 Government has been quite positive, where the government has proposed to invest 100 lakh crore for infrastructure over 5 years. This investment in infrastructure development is the urgent need, especially for tier II & tier III cities and such a significant investment is really laudable, as this will speed-up the development in these cities. In addition the additional deduction Rs 1.5 lakh on interest on loans will definitely be a big driver for real estate, and will attract home buyers back to the real estate market. And lastly the reduction in corporate tax with turnover of up to Rs 400 crore slashed to 25 per cent from a current rate of 30 per cent - this covers nearly 99 percent of the companies in India is again a laudable decision.