While the measures announced in the Union Budget 2021-22 provide relief to the many sections of the economy affected by the COVID-19 onslaught, we gather reactions from real estate industry stakeholders. How beneficial would the Budget reforms prove to developers and homebuyers?
Production-linked incentive (PLI) schemes, Aatmanirbhar Bharat initiatives, long-term debt financing measures for infrastructure and real estate were some of the measures announced in the Union Budget 2021-22 that would help alleviate the stress on the real estate sector to some extent. Many of the demands of homebuyers and developers remain divergent, but the Budget managed to address some of the unified issues, such as affordable housing, rental housing and tax dispute redressal, given the context of the faltering economy.
Following are some of the immediate reactions of industry leaders, highlighting a generally affirmative outlook, with mild apprehension at the absence of certain anticipated sops:
Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani
The union budget presented is visionary and has focused on the nation’s growth. With its focus on the agricultural and rural sectors, infrastructure, health, education, job creation, digital economy, etc, it is a holistic budget that will have an overall positive impact on the economy. With the growth outlook looking promising and support in terms of government spending, we will witness noteworthy traction in the real estate sector too this year. The government has played a tough balancing act between providing demand impetus and keeping a watch on fiscal deficit.
Ankush Kaul, President - Sales & Marketing, Ambience Group
The focus of the Union Budget 2021-22 is to improve economic efficiency and infrastructure growth. Increased focus on infrastructure growth and capital expenditure will impact the overall growth of the real estate sector too. A good infrastructure could propel the development of real estate, both commercial and housing, along the transit corridors, highways and newly proposed airports.
Manpreet Singh Chadha, Chairman, Wave Group
With a clear road map for privatization, the budget proposed CAPEX led to a high trajectory growth story. Retaining tax holiday on Affordable housing projects till March 31, 2022, and the proposal to make dividend payments to REIT and InvIT exempt from TDS is a much-needed relief for the real sector.
Anshuman Magazine, Co-Chairman, CII National Committee on Real Estate & Housing and Chairman and CEO - India, South East Asia, Middle East and Africa, CBRE
In line with previous years, the focus of the government remained on infrastructure development. To address the issue of stressed assets, the FM announced that an asset reconstruction and management company will be set up for stressed assets of banks which in turn should provide the much-needed relief to real estate as well as to HFCs and developers from a liquidity perspective. Another welcome move is the announcement on the monetisation of infrastructure assets and unutilized land parcels.
Ashish R Puravankara, Managing Director, Puravankara Limited
The focus on roads and bridges has always been a priority, but it is also good to see the rise in fund allocation for healthcare, agriculture, and rural infrastructure. We are happy to see the impetus given to the infrastructure development throughout the nation, which in turn provides a push to the real estate sector.
Mohit Goel, CEO, Omaxe Limited
We welcome Budget 2021-22 which lays greater emphasis and outlay on the health, manufacturing and infrastructure sector with an aim to create jobs and boost the economy. State Capitals and tier 2 and 3 cities will benefit immensely from the government’s focus on sectors like roads and highways, ports, power, urban infrastructure, railways.
Pradeep Aggarwal, Founder & Chairman, Signature Global and Chairman, National Council on Affordable Housing, ASSOCHAM
The focus of the government on infrastructural development and MSMEs will lead to job creation, which will help people get financially stable. Looking at the experience of people in the last one year, affordable housing will get more buyers as people want to secure their lives by owning a home.
Anurag Mathur, CEO, Savills India
Tax holidays and exemptions in affordable housing and debt financing for REITs are expected to strengthen the confidence of all the stakeholders in the residential and office segments. Central sponsorships of metro projects in key urban areas among other infrastructure initiatives are likely to bolster the real estate potential of specific micro markets in these cities.
Amit Modi, Director, ABA Corp & President (Elect), CREDAI - Western UP
Overall it’s a positive budget and we appreciate the huge push towards national infrastructure, with nearly 217 projects worth over Rs 1 lakh crore to be completed under National Infrastructure Pipeline and feel this will really stimulate the national economic cycle, while directly benefiting the rural and urban employment along with indirect job creation in infra related allied industries.
Achal Raina, COO, Raheja Developers
The FM has announced measures that might streamline the funds; the real estate sector needs financing for incomplete viable projects, and we hope that banks will extend help to the realty sector. Some of the announcements by the government will increase the demand for affordable housing and REIT compliant projects.
Ashok Gupta, CMD, Ajnara India
The move to exempt notified affordable rental projects from taxes is also a welcome step in the light of the scenario we are confronted with today with a number of migrant workers finding it difficult to find a home for themselves within their budget.
Vikas Garg, Deputy Managing Director, MRG World
The push to infrastructure will benefit the real estate industry indirectly as better infrastructure in the country will help in real estate projects spreading out of compact city limits. A little bit of clarity on Input Tax Credit would have made the matters even better for the industry. All in all, it’s a good budget for the real estate industry.
Manoj Gaur, CMD, Gaurs Group
Elimination of double tax for NRIs on foreign retirement funds will encourage NRIs to invest in real estate assets. Though the number of announcements regarding the real estate sector was few, the sector is all set to gain from the measures taken to strengthen the economy through job creation and asset management. The players in the affordable housing segment will get encouragement from tax holiday being extended for one more year; we would see more developers entering the segment in the coming year.
Kushagr Ansal, Director, Ansal Housing Limited and President, CREDAI - Haryana
The extended support given to infrastructure will generate a higher degree of job opportunities for Tier-II cities, leading to growth in population and higher demand for residential as well as commercial projects. As expected, the affordable housing has emerged as an important segment of the realty industry and FM has duly addressed the biggest concern.
Prateek Mittal, Executive Director, Sushma Group
The support extended to migrant workers, in form of a portal for migrant workers building and construction work has been a positive move in ensuring their safety. Even the rental housing design proposed by the government will solve the problem of residences for migrant workers to a great extent.
Deepak Goradia, President, CREDAI MCHI
The first budget of the decade has raised the vision of an Atmanirbhar Bharat with huge impetus and spending on Infrastructure – a key to the creation of jobs and reviving the economy in the post-COVID area. The 1-year extension to the Rs 1.5 lakh tax deduction on homebuyers’ loan for affordable housing units, along with tax incentive for affordable housing developers is welcomed by the realty industry.
Kamal Khetan, Chairman and Managing Director, Sunteck Realty Ltd
For real estate, the move to extend the tax holiday available for the purchase of affordable houses as well as for the affordable rental housing projects is a welcoming move as it would further strengthen the confidence among both developers and homebuyers.
Rattan Hawelia, Founder and Chairman, Hawelia Group
Issues such as a reduction in stamp duty and registration charges, provision of the input tax credit in real estate have not been addressed. We expected the introduction of reforms to infuse liquidity for the distressed projects, while no major announcement was made to address industry concerns.
Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory
It is a pragmatic and forward-looking budget. The estimated, gradual reduction in the fiscal deficit from 9.5 percent to under 4.5 percent by 2024-25 will help boost consumption in the economy. The government’s big bet on infrastructure is bound to pay off in the long-term and will also catapult desired growth for real estate and the economy. The NPAs of PSU banks have seen an encouraging reduction from Rs 8.96 trillion to Rs 6.8 trillion by end of Fiscal 2020.
T Chitty Babu, Chairman and CEO, Akshaya Pvt Ltd
We welcome the move in launching a portal to maintain information on gig workers and construction workers. This could help in monitoring the health and also in providing the benefits. We also welcome the major proposal about boosting the road, rail and airport infrastructure for a robust public transport.
Lindsay Bernard Rodrigues, Co-Founder and Director, Bennet & Bernard Group
The budget demonstrates the government's resolve to focus on demand generation, spurring jobs, increase infrastructure spends, healthcare for all, attract foreign institutional investors and increase farm income. It is also noteworthy that the government has stressed upon building on an aspirational India in order to boost the standard of living and economic development.
Milan Thakkar, CEO, Walplast
It is encouraging to see the government has doubled its allocation towards the MSME sector by setting aside Rs 15,700 crore in FY22. This combined with the allocation of PLI schemes of Rs 1.97 lakh crore over five years along with increased allocation towards infrastructure improvements in the form of highways and roads will help the MSME sector.
Harshad Chetanwala, Co-Founder, MyWealthGrowth.com
The announcements in the budget have been in the right direction and it does have its heart in the right place as far as focus on growth and development is concerned. The emphasis on Health and Infrastructure are key for our economy from growth perspective. Increase in infrastructure spend will drive growth, increase employment and boost consumption.
Rajat Johar, Country Head, Skootr
The budget 2021 provided a strong ground for the country to move towards the goal of Atmanirbhar Bharat and effectively come out of the shadows of COVID-19. Continuing its commitment to further strengthening the national infrastructure, the government’s proposal to build 8,500-km of highways by March 2022 will benefit the commercial real-estate sector and will call for a rise in demand for commercial and office spaces in the south and east India.
Harry Parikh, Associate Partner - Transaction Tax, BDO India
The Finance Minister’s speech remains silent on amending any material tax rates giving a huge relief with respect of bringing a COVID Tax cess. The speech misses key tax expectations such as special consideration for COVID related expenses, introduction of new tax incentives for boosting manufacturing and consumer spending, rationalising tax rates for LLP, clarifying on issues arising on digital tax, etc.
Ashish Deora, CEO and Promoter, Aurum Ventures
Adequate measures have been taken keeping affordable housing in mind number of decisions with respect to the extension of tax holiday and housing deduction by another year and extra tax exemption for affordable housing loan by another year. These initiatives will put additional liquidity in the hands of home buyers which would further boost demand.
Krish Raveshia, CEO, Azlo Realty
The real estate industry was expecting growth measures from the Union Budget. Given the current situation, the Finance Minister has presented a balanced budget. The budget was primarily focused on the infra and healthcare sector. Steps like a 1-year tax holiday for affordable housing projects and a 1-year extension for an additional deduction of interest up to Rs 1.5 lakh on loan for affordable housing will benefit all stakeholders of the industry and boost investments.
Ashwani Awasthi, Managing Director, RICS School of Built Environment
This budget provides a boost to the infrastructure sector where the budgetary allocation is evenly distributed in urban and rural areas helping in overall upliftment of the infrastructure and construction sector. This can be ascertained by the government on providing / on starting metro rail services in 27 cities, construction of 118000 km of roads. 137 percent more allocation, than the previous allocations on health care infrastructure, will boost the built environment overall.
Rajesh Binner, Founder and CEO, YieldAsset Real Estate Tech Pvt Ltd
The proposed Nationalized AMC (Asset Management Company) to take over stressed assets will stimulate growth and bring a certain level of stability for the commercial realty sector. The relaxed rules in the Companies Act for start-ups and One-person Company creates a frictionless environment. Fintech focussed centre at GIFT City will be very encouraging to the vibrant and high-growth start-ups. GIFT city also provides tax holidays to rental/leasing companies.
Rohan Khatau, Director, CCI Projects Pvt Ltd - Rivali Park
Government has rightly continued its focus on affordable housing projects. By allowing additional deduction of Rs 1.5 lakh on home loan interest for homebuyers and tax holiday for developers undertaking such projects by another year, it has ensured to create a right balance between demand and supply.
Ajay Kapoor, CEO, Adhiraj Constructions
Homebuyers sitting on the fence can take advantage of the extension of tax benefits on home loans up to FY22 and added extension exemption on the purchase of affordable houses. Middle-class taxpayers now have another year better to manage their finances and investment in their dream homes.