Reserve Bank of India
The government should take steps to increase liquidity in the system in the upcoming budget to give a boost to cash-starved real estate sector and achieve ‘Housing for All’ by 2022, according to property developers and consultants. Allotment of industry status to real estate sector, single-window approval for development of realty projects, further tax exemptions to homebuyers as well as developers and a policy to promote rental housing also figure in realtors’ wishlist for this budget.
“While the Modi-led government in its last term had introduced several reformative measures with the overarching aim to revive the sector, some measures are still awaited with respect to mitigating impending challenges related to fund raising, capital and liquidity,” said Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa, CBRE.
Magazine further said in addition to the grant of an industry status, the sector is also expecting the government to further ease ECB (External Commercial Borrowings) norms. According to Dhruv Agarwala, CEO, PropTiger.com, government’s intervention to resolve the Non Banking Financial Company (NBFC) crisis will help in reducing the liquidity constraints in the sector.
“We can also expect the government to step in to increase bank funding to the sector to help projects stuck owing to the liquidity concerns,” he said. Puravankara MD Ashish Puravankara echoed similar sentiments and stressed on repressing the liquidity crunch in the real estate sector.
He also felt the need to frame a National Rental Housing Policy in order to meet the target of Housing for All by 2022. Sobha Ltd Vice Chairman and MD J C Sharma sought an increase in the threshold value of affordable housing under the Pradhan Mantri Awas Yojana (PMAY) scheme from the current Rs 45 lakh to Rs 75 lakh as land costs are high in metro cities.
REPL CMD Pradeep Misra said government should take steps to grant infrastructure status for the real estate sector, while, Ruparel Realty MD Amit Ruparel said “having a single window clearance is what we look up to which will be beneficial for both the developers and the consumers”.
Saya Homes CMD Vikas Bhasin expects that the budgetary support for subsidy amount under Credit-Linked Subsidy Scheme (CLSS) for both Economically Weaker Section (EWS)/Lower Income Group (LIG) as well as Middle Income Group (MIG) should be doubled so that more home aspirants can purchase their dwelling units.
Signature Global Chairman Pradeep Aggarwal said the government should double the amount of fund allocation for Pradhan Mantri Awas Yojana.
Neh Srivastava, Under Secretary Ministry of Home Affairs & President CSSOS, hoped that Budget will have some plan to kick start funding in the sector.
“Tax incentives for both homebuyers and builders, along with a special scheme for affordable housing, are the areas we are looking forward to,” he said.
Wealth Clinic CMD Amit Raheja said, the RBI has cut the repo rate thrice but banks have not passed on the benefits. “We expect the government to come up with some policy that can help the buyers get that benefit.”
In the June review, RBI had cut key lending rates by 0.25 per cent for the third time this year to spur economic growth.
Wadhwa group MD Navin Makhija hoped that the budget will emphasise on housing sector and more tax sops will be provided to homebuyers.