No fo­cus on realty in the bud­get?

The fo­cus of the cur­rent bud­get has been on im­prov­ing ease of liv­ing

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Nam­rata Kohli ht­es­tates@hin­dus­tan­

The fo­cus of Union Bud­get 2018-19 is on “health­care, ed­u­ca­tion and so­cial se­cu­rity” in the words of the Fi­nance Min­is­ter, Arun Jait­ley. He clearly spelt the mo­ti­va­tion of this year’s bud­get as ‘Ease of Liv­ing’ with con­tin­ued push for af­ford­able hous­ing but there wasn’t much to cheer about for the real es­tate sec­tor.

The real es­tate sec­tor’s long­pend­ing de­mand of re­ceiv­ing “in­fra­struc­ture” sta­tus and sin­gle win­dow clear­ance for all real es­tate projects found no men­tion. Nor were the uni­form stamp duty or re­duc­tion in G ST rates con­sid­ered. From home buyer’ s per­spec­tive, ad­di­tional re­lief on stamp duty and reg­is­tra­tion could have been re­duced or merged with G ST to ex­pe­dite the de­ci­sion of home buy­ing.

There was sus­tained thrust for af­ford­able hous­ing af­ter ac­cord­ing it “in­fra­struc­ture” sta­tus in Union Bud­get 2017-18, and re­duc­ing the G ST from 12% to 8% by the G ST coun­cil as a pre­cur­sor to this year’s bud­get. There was an an­nounce­ment on cre­ation of Af­ford­able Hous­ing Fund un­der the Na­tional Hous­ing Board-this will al­low bet­ter ac­cess to cap­i­tal for such de­vel­op­ments in ur­ban and semi-ur­ban ar­eas. As many as 51 lakh houses in ru­ral ar­eas are to be built in 2018-19. Ac­cord­ing to Bhairav Dalal, Part­ner - Real Es­tate Tax, PwC In­dia “Af­ford­able Hous­ing con­tin­ues to get pref­er­en­tial treat­ment to­wards achiev­ing the vi­sion of “Hous­ing for all” by 2022. Cre­ation of the Af­ford­able Hous­ing Fund will cer­tainly ease the fund­ing gap .”

In­fra­struc­ture was red hot as the Fi­nance Min­is­ter pro­posed the re­de­vel­op­ment of over 600 rail­way sta­tions, com­ple­tion of 9,000 kms of high­ways, de­vel­op­ment of the sub­ur­ban rail­way net­works in Ban­ga­lore and Mum­bai, as well as im­prove­ment of re­gional con­nec­tiv­ity with UDAN ex­pected to con­nect 56 un­served air­ports and 31 un­served he lip ads in the coun­try. Anuj Puri, chair­man Anarock prop­erty con­sul­tants lauded the re­gional air con­nec­tiv­ity scheme to con­nect 56 un­served air­ports as “good news for busi­ness growth and of­fice space de­mand in smaller cities, with a nat­u­ral spinoff de­mand for hous­ing on the back of job gen­er­a­tion.”

With size able al­lo­ca­tions to the rail and road sec­tors, the Bud­get clearly rec­og­nized the in­fra­struc­ture sec­tor as a growth driver. Ac­cord­ing to Anshuman Maga- zine,CBRE–“An­nounce­mentsin al­lo­ca­tion for in­fra­struc­ture and road and high­way de­vel­op­ments of over 9000 kilo­me­ters, air­port de­vel­op­ment to in­crease ca­pac­ity by five times as well as 600 rail­way sta­tion de­vel­op­ment will cre­ate op­por­tu­ni­ties for de­vel­op­ments around these lo­ca­tions. Fur­ther gov­ern­ment con­tin­ues to fo­cus on the ‘Bharat­mala’ to de­velop 60,000 kilo­me­ters of roads fur­ther al­lows for de­vel­op­ment of new lo­ca­tions .”

Smart cities was on agenda as the bud­get laid em­pha­sis on ur­ban de­vel­op­ment by al lo­cat­ing Rs 2 lakh crore to­wards the 99 short­listed cities un­der the Smart Cities project, and im­prov­ing ur­ban in­fra­struc­ture un­der AMRUT.

In­dus­tryi nsid­ers said that the real es­tate in­dus­try though­nota di­rect ben­e­fi­ciary may gain‘ in­di­rectly ’, with vast in­vest­ments in smart cities and in­fra­struc­ture. Ac­cord­ing to Jaxay Shah, Presi- dent, CREDAI Na­tional – “More than these di­rect mea­sures, how­ever, it is the deeper eco­nomic logic of the Bud­get which is the ma­jor boost for hous­ing and real es­tate. The pub­lic in­vest­ment in in­fra­struc­ture in the ru­ral ar­eas, agri­cul­tural mar­ket­ing, smart cities and ur­ban con­nec­tiv­ity, mul­ti­ply in­vest­ment prospects for real es­tate sec­tor.”

How­ever the big­gest take away in Union Bud­get 2018-19 was for the health­care sec­tor with the idea of uni­ver­sal health­care be­ing in­tro­duced, with noth­ing spe­cial for real es­tate. Ac­cord­ing to Dr. Ni­ran­jan Hi­ranan­dani, Na­tional Pres­i­dent Naredco– “The one thing that touched my heart more than my mind was the idea of go­ing to­wards uni­ver­sal health cov­er­age for 50 crore peo­ple. This was un­prece­dented and I am proud to see what the gov­ern­ment is as­pir­ing to do- a first in world his­tory, not just In­dian his­tory.

How­ever when we look at our very own real es­tate sec­tor in con­nec­tion with the Bud­get-I can only say “Oh my God, we have missed the bus.” Naredco had many ex­pec­ta­tions, says Hi­ranan­dani “es­pe­cially be­cause we have a tar­get to achieve in a given time frame. But let’s dis­tin­guish be­tween ex­pec­ta­tions and con­cerns which are sacro­sanct which ‘at the min­i­mum’ need to be ad­dressed and I am stat­ing only those here. One is that the real es­tate sec­tor needs to be given an in­fra­struc­ture sta­tus. Ad­e­quate con­ces­sions need to be given such as bring down G ST to 6% across the board, all seg­ments of hous­ing, rather than a piece­meal con­ces­sion to just af­ford­able hous­ing, at least till the time ob­jec­tive of PM “Hous­ing for all 2022” is achieved. To­day there is far greater in­cen­tive to in­vest in stock mar­ket ver­sus real es­tate, as in­vest­ment in the lat­ter comes with the bur­den of all kinds of taxes.

The other point raised by Naredco was about cir­cle rates. Says Hi­ranan­dani, “We feel that sec­tion about cir­cle rate-where if you sell prop­er­ties at a rate less than the cir­cle or the ready reck­oner rate, you are pe­nal­ized for it -needs to be scrapped, done away with and thrown into the river, be­cause it does not suit the buyer, the seller or the prin­ci­pal ob­jec­tive of ra­tio­nal­iz­ing prices.” Be­sides, there is a con­cern about tax on va­cant flat. “Cur­rently if there is a va­cant flat, one is charged a tax as no­tional rent. How can the Go I pro­mote the con­cept of cre­at­ing sur­plus hous­ing stock amongst de­vel­op­ers with a sec­tion that con­flicts with the ob­jec­tive of cre­at­ing sur­pluses?”

Fi­nally, it’s not re­quired for ev­ery­one to in­vest into buy­ing a house. In US more than 50% of the peo­ple stay on rent. There is an im­per­a­tive need to pro­mote rental hous­ing.”

Curb­ing cryp to cur­ren­cies was also an­nounced this Bud­get. Says A nu jP uri ,“There was con­jec­ture that cryp to cur­ren­cies would find their way into In­dian real es­tate, as it has in de­vel­oped coun­tries, ef­fec­tively be­com­ing the ‘new black money’ in the sec­tor. With the Gov­ern­ment com­mit­ted to tak­ing all nec­es­sary steps to elim­i­nate the use of cryp to cur­ren­cies in In­dia, peo­ple who were look­ing at them as a get-rich-quick route will have to look at tra­di­tional as­set classes and in­vest­ment routes again. “There has been a si­lence in the bud­get on stim­u­lat­ing main­stream real es­tate de­mand,” says Shishir Bai­jal, man­ag­ing di­rec­tor, Knight Frank In­dia -“The sec­tor grap­pling with there forms-driven new or­der has been bereft of any mean­ing­ful in­ter­ven­tions that could have been achieved through the bud­get.” To sum­marise, the bud­get was, as Anuj Puri de­scribes, balanced but not a boon for the real es­tate sec­tor.


The sec­tor’s long­pend­ing de­mand for a sin­gle win­dow clear­ance for all projects found no men­tion in the bud­get

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