If the NDA government makes the construction of affordable housing the centrepiece of its policy for the real estate sector, half the task of putting the economy back on rails is done, experts say.
All the stakeholders of the real estate sector, as also of the entire industry, are awaiting the Union Budget of 2015-16 to be placed in the Lok Sabha by finance minister Arun Jaitley later in the day with bated breath.
Many issues like tax limit and incentives, cheaper funds, RBI cut on lending rate to bankers and, at the policy level, non-implementation of single window clearance and infrastructure status for the realty sector, Real Estate Regulatory Bill (RERA), and poorly drafted laws like land acquisition act of 2013, etc, have undermined the potential of the realty sector, and the economy on the whole, and brought down growth. Experts say that to achieve housing for all by 2022, developers must be given greater incentives to build affordable category houses on a mass scale. Also, to attract overseas investment like FDI and REITs, which can make available the necessary funds for affordable housing projects in the country, there must be greater transparency in the way the sector performs and clarity on ambiguous laws.
If all these find mention in the Union Budget, they would act as a catalyst in achieving the targets set in the NDA poll manifesto.
Affordable housing is the key to help the realty sector emerge from the current crisis.The real estate fraternity is looking forward to the Budget to give relaxation in the home-loan rate of interest to homebuyers, availability of easy funds for land purchase and development of projects from banks and other financial institutions at lesser rate of interest to not only bring the economy back on rails, but push it to double-digit growth.
David Walker, MD of SARE Homes, says: "In Budget 201516, the top priority for the gov ernment would be to reduce the fiscal deficit in the medium term, which will further augment the case for interest-rate reductions. Key aspects to watch for on this are spending the oil-saving windfall wisely, sale of PSUs to the more efficient private sector and better targeting of subsidies to ensure more actually gets to those in need while their overall cost is cut. Clarification and simplification of FDI investment rules will help attract the much need foreign capital for development of infrastructure and, of course, smart cities."
Rakesh Yadav, MD of Antriksh Group, says: "The real estate sector is one of the main contributing sectors to the Indian economy and, yet, it does not enjoy the status of industry. This is certainly the biggest hope of the sector from the Modi government in the Union Budget for 2015-16."
Ashok Gupta, MD of Ajnara Group, says: "The long-pending request of single window clearance is still under consideration of this government. This should be taken as the one step that would reduce the burden of developers; it would also reduce the cost and time which we generally spend on taking approvals from so many authorities. The system of transaction and approvals should be made easy and online."