Hopes Abound

It’s that time of the year when all eyes are on the last day of the month to find out  what the Finance Minister has in store for them when he opens his customary briefcase in Parliament. Though the real estate industry was sufficiently enthused with the first Union Budget of the NDA Government, the second exercise last year turned out to be rather disappointing. Once again the sector has lined up a sumptuous wish-list and is quit hopeful that it won’t be overlooked in the Union Budget 20 16-17.

The first Union Budget presented by the Modi Government in the second week of July 2014 lifted realty sector’s spirits to a new high. In the second exercise on February 28 last year, the industry was left in the lurch and its wish-list virtually overlooked.

It’s time now for the Union Budget 2016-17 and the stakeholders in the industry are keeping their fingers crossed till February 29. The list of demands is long and hopes abundant that the Finance Minister won’t disappoint them, this time at least.

From seeking industry status and single-window clearance to simplification of taxation and reduced cost of construction, the industry has an elaborate list o demands which, if not addressed soon, will plunge it into deeper crisis. The sector has been going through slowdown over the past
few years but with the arrival of Team Modi on the helm of affairs, clouds of doom were largely dispelled and it seemed the recovery was around the corner.

Getting infrastructure status has been the long-pending demand of the real estate sector and this time too we expect that it would be given.
Manoj Gaur, MD, Gaursons India Ltd

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The 2014-15 Budget propelled these hopes further and the sector was exultant with the slew of realty-friendly measures announced by Finance Minister Arun Jaitley.

We expect the Budget 2016 to focus on the measures needed to streamline and ease the process for introduction of goods and services Tax.
Aman Singh Gehlot, Director, Ambience Group

We are expecting that the Government focuses on providing finance to real estate sector at reduced costs.
Prashant Tiwari, Chairman, Prateek Group

Without announcing any grandiose plans or making tall statements, Jaitley’s first Budget had a clear message that the Government was serious enough to bring the real estate industry back on the rails. Among the host of steps, the Budget of the newly installed Government proposed allocation of Rs. 7,060 crore for development of 100 Smart Cities, relaxation of norms for the entry of foreign capital and tax relief on home loans. But the biggest, perhaps, was Jaitley’s announcement that the Government would provide necessary incentives to Real Estate Investment Trusts (REITs).

Single-Window clearance has been a dream but if cleared it would bring dedicated authority with great influence on speed of getting clearances
Deepak Kapoor, Director, Gulshan Homz

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The measures announced by Jaitley in his maiden Budget coupled with the generation of overall positive sentiment received an overwhelming response from the real estate sector. Some of its demands were taken are of though there was still a long list of pending concerns. But instead of addressing these, the Budget presented last year proved a dampener for the real estate sector.

Providing tax breaks specific to rental income will provide a noteworthy boost to rental housing segment which will help increase rental supply in the metros especially
Kushagr Ansal, Director, Ansal Housing

The Government should focus on and ensure smooth operation of the Budget session this year and try to pass as many Bills as possible
Ashok Gupta, CMD, Ajnara India

A major miss of the last year was GST whose implementaion will basically work on three major elements for this sector
Rakesh Yadav, Chairman, Antriksh India

We are looking forward for the passage of the Real Estate Regulatory Bill which would boost customers confidence and will help in building good bonfing between builders and homebuyers’
Gaurav Gupta, General Secretary, Credai RNE

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With Union Budget round the corner, we are expecting that affordable housing and cheaper home loans remain the top priority
OM Chaudhary, Chairman & CEO, Astrum Value Homes

The Government needs to focus on growth incentivised reforms and policies to support the sector
Sanjay Rastogi, Director, Saviour Builders

Considering the slowdown in demand for properties in real estate market, we are expecting tax sops for affordable housing and restructuring of loans as well
Anil Kumar Tulsiani, CMD, Tulsiani Contructions and Developers

We are looking forward to the Government’s support towards the real estate sector with tax breaks and additional incentives
David Walker, MD, SARE Homes

In the Union Budget 2015-16, the Finance Minister didn’t manifest the thrust to the sector as was witnessed in his previous exercise. Whether it was granting industry status or relief in home loans or a host of other demands, the Budget didn’t attempt to meet any of these. It’s another matter that the RBI’s surprise rate cut gift coming three days after the Budget was able to lift their spirits to some extent.

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Reeling under a prolonged slowdown, the real estate sector is looking up to The Budget 201617 to provide it the necessary impetus. Among the factors impeding its growth is the higher cost of funds due to the lack of industry status to the sector. This has been a long-standing demand of the industry and its time the Government paid heed to it.

Another major issue confronting the sector is the multiplicity of authorities for various approvals required for a real estate project. A single-window approval is essential for the developers to complete their projects on time and thereby stick to the delivery schedule promised to the consumers. The industry is hopeful that the FM won’t disappoint them on these two critical issues in his third Budget exercise.

“The upcoming Budget should come up with holistic approach rather than satisfy sentiments of a particular segment”.
Dinesh Jain, MD, Exotica Housing

Apart from these, there are pending legislations like the RERA Bill, which can bring about the much-required transparency to the sector, and early passage of GST. On taxation front also, there are lots of expectations from Jaitley bringing down the home loan rates so that people are
encouraged to invest more in property and housing.

There is also a strong case for making Real Estate Investment Trusts (REITs) functional by exempting these from taxation such as tax on rent, stamp duty, transfer of assets and distribution of dividends. The industry is hoping for a serious consideration to all these key issues and some other realty friendly measures being unfolded in the Union Budget 2016-17.

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Realty & More contacted prominent stakeholders across the real estate industry to find out what they expect from Mr Jaitley when he presents the annual fiscal document in Parliament on February 29.

Manoj Gaur, President of Credai NCR & MD, Gaursons India Ltd, said at the outset, “We are pinning lot of hopes on the upcoming Union Budget 201617.” Coming to the set of demands, Gaur said, “Getting infrastructure status has been the long-pending demand of the real estate sector and this time too we expect that it would be given so that developers can avail finances at cheaper rates from financial institutions”.

“The developers who are bringing affordable housing projects should get finance under special package in the Budget 2016”.
Shivakshi Gogia CEO, Ascent Group

Also, he said, “We are eagerly waiting for single window clearance system so that approvals are given in a predefined timelines further more bringing transparency in the overall working system”.

Besides these, Gaur said slashing down the prices of products of allied construction industries like cement, steel and other building materials is also necessary for bringing down the overall cost of construction. “The passage of Real Estate Regulatory Bill and GST is also one of the areas
where the Budget needs to focus on,” he concluded.

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“The Government should allocate an amount exclusively for building infrastructure and improving connectivity”.
Satyendra Tomar,  JMD. Proplarity Group

Aman Singh Gehlot, Director, Ambience Group, told Realty & More, “We expect the Budget 2016 to focus on the measures needed to streamline and ease the process for introduction of Goods & Service Tax.” Adoption of GST, he said, “is expected to ease the businesses in managing the multiple indirect taxes in the current indirect tax regime, remove cascading effect of taxes, and bring down prices for end consumers.”

Gehlot said the Budget also needs to address the long-pending demand of giving industry status to the real estate sector. “This will enable us to access funds at lower rates from financial institutions, which will drive down cost and eventually benefit end customers as prices will soften,” he said. Summing up, the Ambience Director said, “We also expect the Budget to give a further fillip to the system of single-window clearance so that projects are completed on time and result in lower cost for both developers and buyers.”

Prateek Group Chairman Prashant Tiwari said, “We are expecting that the Government focuses on providing finance to real estate sector at reduced costs and on the other hand also create an atmosphere where approval mechanism is faster. Tiwari added, “We are looking forward that REITs are made more investor friendly by reducing the burden on investors. We have been pressing hard that real estate sector gets the industry status.

The long pending demand for clearance of GST should also become a reality now”. Saying that the industry has a few “basic demands”, Deepak Kapoor, President, Credai Western UP& Director, Gulshan Homz, said, one of this is giving industry status to the real estate sector. “If we are
provided the industry status than what we expect is that like other industries, cost of funding to this industry will be competitive and benefit will go to the customers. “Kapoor said, “Our second important demand is the single window clearance system so that we can fulfill our promise of on time delivery.” Elaborating further, he said, “Single-window clearance has been a dream but if cleared it would bring dedicated authority with great influence on speed of getting clearances because delays eat away the profits and customer confidence. ”

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(The Budget) should introduce low slabs of interest rate for home loan to push affordable homes”.
Naveen Gole,  MD, Radhey Krishna Group

Kushagr Ansal, Director of Ansal Housing, told Realty & More in the upcoming Union Budget, the Government needs to provide tax incentives for renting out of residential properties. “Providing tax breaks specific to rental income will provide a noteworthy boost to rental housing segment which will help increase rental supply in the metros especially,” he said. Ansal added, “The developers have been campaigning for a faster project approval process for timely completion of projects.

Faster approvals will push up the supply pipeline, lower prices and also ensure that this sector remains practical as a business.” The Budget, according to him “must also ensure that construction quality norms are not compromised in the process and that faster approvals do not result in support infrastructure failure in new grounds being developed”.

Ajnara India CMD Ashok Gupta wanted the Government to focus on and ensure smooth operation of the Budget session this year and try to pass as many Bills as possible. Most eyes, he told R&M, “are set on the misses of last year such as RERA, GST, Land Acquisition Bill and industry status. These are extremely important for this sector to grow and perform, and this Government has left no stones unturned in announcing mega plans for the future that will be directly affected by the implementation of aforementioned Bills.

According to Rakesh Yadav, Chairman, Antriksh India, “A major miss of the last year was GST whose implementation will basically work on three major elements for this sector: simplification of tax structure, reduction in construction costs and better transparency.”

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Speaking about its contribution post-acceptance, he said, “We are predicting a nationwide realty sector growth by almost 15-20 per cent than projected in the course of next 5-7 years. There will be a quick reaction towards the sector by its customers as demand is bound to increase due to reducing costs and improving transparency in the sector that has been the hurdle making this sector suffer for long now.

Gaurav Gupta, General Secretary, Credai Raj Nagar Extension, was hopeful that in the coming Budget, the Government will help facilitate easy financing and address the housing problems to a large extent.

The single-window clearance system, he said, “would help developers to complete projects on time as speedy approvals can be availed which eventually would help in timely execution of projects.” Gupta added, “We are looking forward to the passage of the Real Estate Regulatory Bill which would boost customer confidence and will help in building good bonding between builders and homebuyers.”

Om Chaudhry, Founder & CEO of FIRE Capital and Chairman & CEO of Astrum Value Homes, said, “With Union Budget round the corner, we are expecting that affordable housing and cheaper home loans remain the top priority. Section 80 IB (10) which allows 100 percent tax exemption on housing projects with a certain limit of built up area should bring affordable housing under it.” Chaudhry said, “We are also demanding tax sops for affordable housing which will further boost the real estate market. Affordable housing is a fragment where the Government should implement tax free status for builder community which was previously offered.”

“After months of slowdown, realty sector is on its way to recovery and it’s very important that it gets the necessary impetus through the forthcoming Budget”, said Sanjay Rastogi, Director, Saviour Builders. The Government, he said, “needs to focus on growth incentivised reforms and policies to support the sector.

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Tax norms should be revised so that REITs become more attractive as well as flexible further giving boost to the investment in real estate market”. Rastogi concluded his response by saying, “Speedy passage of Goods and Service Tax is something which is being looked with lot of hope as it will replace numerous taxes with single tax, helping the customers in a big way”.

Anil Kumar Tulsiani, CMD, Tulsiani Constructions and Developers, said, “Considering the slowdown in demand for properties in real estate market, we are expecting tax sops for affordable housing and restructuring of loans as well” He added, “We are hopeful that the Government formulates policies with a plan for next seven to ten years where demand for houses and urbanisation can be met efficiently.” The Budget, he said, “can make real estate industry more investment friendly by introducing a revised tax code.

If GST clears in this Budget session, numerous taxes payable by home-buyers will be eliminated”. David Walker, Managing Director of SARE Homes, told Realty & More, “We are looking forward to the Government’s support towards the real estate sector with tax breaks and additional incentives since this sector has immense potential to boost general economic activity and create thousands of new jobs, given its upstream and downstream linkages.”

Coming to the wish-list, Walker said, “The real estate sector should be accorded the industry status allowing investments and funds at competitive rates to spur economic growth.” He said discussions around the Real Estate Bill must reach a positive conclusion which will give homebuyers the confidence to return to the market and deal with responsible builders.

Furthermore, he said, “the implementation of GST Bill will eliminate multiple levels of taxation and further reform the lengthy approval process that would facilitate speedy project execution.”

Kashi Nath Shukla, CMD of Tashee Group, said, “In this Budget we expect the Government to go on with positive policy announcements to develop business environment and offer strong push to growth.” This year, he said, the growth scenario looks better than the last year for all sectors and as a developer we look forward to a lot in term of attention and income for the sector. Shukla added, The long pending demand to declare real estate sector as an industry is principal concern.

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The Government should also guarantee quick passage of Goods and Service Tax which will restore several taxes and help the consumers. The implication for interest on housing loans needs to enlarge from the current limit. Elimination of numerous taxes can give confidence to real estate sector on large scale. II

According to Sonica Malhotra Kandhari, Director, MBD Group, “We expect the Union Budget to take steps to subsidise the spiraling cost of real estate in the country for development of hospitality projects.

While the 2014 Budget had announced REITs, not much has happened since then. The Budget must take steps to such that all taxation benefits are available for REITs as internationally prevalent”. As a concluding note, she said, “We also expect the Budget to fulfill our long-standing demand of giving infrastructure status to hospitality sector. This will help in bringing down our cost of funds amongst other benefits.”

Radhey Krishna Group MD Naveen Goel was of the opinion that the real estate industry should get land and finance on low rate and this is only possible when it gets industry status. Budget, he said, “should also introduce low slabs of interest rate for home loan to push affordable homes and bring digital module of project approval from beginning to completion.”

Honey Katiyal, Founder & CEO of Investors Clinic, said the real estate sector is seeking industry status for long. To achieve Government’s mission of ‘Housing for All’ and affordable housing, developers need access to low cost funding. Industry status will give builders access to funds at lower interest rates and reduced collateral thereby making housing more affordable”, he said.

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Pawan Jasuja, Director, Finlace Consulting, opined that brokers should get a permanent registration number on all-India basis to do business and at the same time be responsible for the deal. The Government, he added, “should bring special slab system in loan and tax for developers and buyers where one is willing to construct affordable housing and the other ready to buy”.

Dinesh Jain, MD, Exotica Housing, was of the view that the upcoming Budget “should come up with holistic approach rather than satisfy sentiments of a particular segment.” First of all, he said, the industry should get industry status and single-window system to take on new projects in 2016. To push affordable housing, he wanted the Budget “to ensure easier funding and land titles for developers. ”

The industry is facing multiple tax liability and the Government should introduce one tax system for real estate, echoed Shivakshi Gogia, CEO of Ascent Group. He said the developers who are bringing affordable housing projects should get finance under special package in the Budget 2016. “Delay in possession and delivery has emerged as the biggest problem and for that the Government should bring such provisions that can save buyers’ hard-earned money and also ensure construction of the project”.

Introducing a fresh dimension, Satyendra Tomar, JMD, Proplarity Group, said, “The Government should allocate an amount exclusively for building infrastructure and improving connectivity, more IT & ITeS spaces in the Tier-2 and 3 cities, and marginal areas apart from pushing the metros.” To achieve ‘Housing for All’ in coming years, he said, “The developers should be allowed to get cheap land, easy finance and investment and tax relaxation”.

The wish-list is unending and the hopes of the realty sector are at the peak. It’s only a question of days when all will come to know how much of it the Finance Minister has been able to clear in his Union Budget for the financial year 2016-17.

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