01/03/2015
BUDGET 2015: Top 5 Benefits for the Realty Sector
By Neha Pathania Kashyap
February 28, 2015 130 Share on
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GOOD NEWS FOR REAL ESTATE
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Finance Minister (FM) Arun Jaitley has announced the Budget for the full year which is aimed at overall economic growth and boosting investment for the country. We provide you an insight into the top five benefits that the Budget is implying for the real estate sector.
1. Housing for All: Although the announcement of providing 6 crore housing units by 2020 is encouraging, yet the implementation strategy was not revealed by the FM. As a part of this announcement, roof for each family in India by 2022 will require 2 crore houses in urban area and 4 crore houses in rural area. Strong policy directives are needed to back this aspect.
2. Earmarking Rs 1,200 crore for DMIC projects: This Budget has spelt good news for the infrastructure sector as Rs 1,200 crore has been earmarked initially for the Delhi-Mumbai industrial corridor (DMIC) projects. The FM clearly mentioned this fund allocation could increase if required. Additionally, an announcement to establish National Infra Fund, allocating Rs 20,000 crore is also a positive move in the direction of development of infrastructure. The FM also said that at least one lakh kms of road will be constructed and the existing road construction will also pick up pace.
3. Capital gains regime for REITs/INvITs: The move to rationalise capital gains regime for real estate investment trusts (REITs) and investment trusts (InvITs) is a positive one as this will pave the way for the listing of REITs. It is believed that the move could propel investment in these market instruments and benefit individuals and companies likewise.
4. PPP model of infrastructure to be revitalized and realigned: The support offered by government in announcing more public-private partnership (PPP) models in the real estate sector is certain to propel a revitalization in the industry as the pressure will not fall alone on either the developer or the state municipal body to undertake large projects.
5. GST to be introduced from April, 2016: The announcement that the much awaited goods and services tax (GST) will be introduced on 1st April 2016, will definitely rejuvenate the industry. The proposed GST should replace the multiple taxes such as value added tax (VAT) and service tax with a single tax and therefore, ensure smooth flow of credits through the chain. It is expected that the GST would reduce the construction cost for the developer, resulting in maintaining the price levels of houses.
