Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Politics / Policy/  Budget 2015 evokes mixed reactions from real estate sector
BackBack

Budget 2015 evokes mixed reactions from real estate sector

Arun Jaitley talks about creation of six crore homes to realize the ‘housing for all’ vision but fails to mention about the 100 smart cities

Photo: Ramesh Pathania/Mint (Ramesh Pathania/Mint)Premium
Photo: Ramesh Pathania/Mint
(Ramesh Pathania/Mint)

Mumbai: The real estate industry, which had pinned high hopes on Union Budget 2015 for revival of the liquidity-starved sector, welcomed some of the proposals of finance minister Arun Jaitley, but said that there was no clarity on development of 100 smart cities. The industry leaders said the document also lacks serious incentives to boost the key sector.

In the first full-year budget of the National Democratic Alliance (NDA) government, Jaitley proposed to rationalize the capital gains regime for the sponsors exiting at the time of listing of units of real estate investment trusts (REITs) and Infrastructure Investment Trusts (InvITs) and also announced creation of six crore homes to meet the centre’s “housing for all" vision.

“Overall the budget’s direction is positive with several macro factors making way for a better economic regime. However, with three consecutive bad years for real estate that left developers and other stakeholders gasping for fresh air, the expectations were high. Unfortunately, the budget has not given them anything to cheer about," said Shishir Baijal, chairman and managing director, Knight Frank India.

“The budget announced the government’s intention to build six crore houses towards the “Housing for all by 2022" initiative. Specific details on this subject, however, were not elaborated on and neither was any light shed on the Sardar Patel Urban Housing Mission in terms of fund allocation, funding instruments and entities, exact timelines and project locations, among other factors," said Anshuman Magazine, CBRE South Asia’s chairman and managing director.

Gera Developments’s managing director Rohit Gera said, “Though the budget is positive, it has completely ignored the residential real estate market and there is a total lack of any push for the housing sector. We had hoped for increased deduction towards home loans amongst other things to give an impetus to the industry."

“Given the prevailing indirect taxes, stamp duty, borrowing costs for both buyers and developers, the industry was hoping for some serious incentive given the significant housing shortfall, but it was one big miss. However, the industry is hopeful in the course of the year the government will make some announcement in this regard," said Gera.

Embassy Office Parks chief executive Mike Holland said, “Indications that tax pass through on REITs will be implemented is welcomed. We will await and review the detail but if the understanding is correct, this has the potential to stimulate the REIT market in India which can release lower cost capital, increase liquidity and stimulate the next phase of enhancement of India’s urban infrastructure."

“The budget is positive and balanced. The proposal to rationalise capital gains tax regime for REITs is a welcome step. Also, the reduction in corporate tax will lead to higher investments in the realty sector," said Gaurav Gupta, director of Omkar Developers.

“The decision on providing six crore urban and rural housing units, revisiting and revitalising the PPP model, increasing funding for infrastructure, introduction of predefined permissions regime and proposal to rationalise capital gains tax regime for REITs, will have a positive impact on the sector," said Brotin Banerjee, managing director and chief executive of Tata Housing.

The industry, however, said the budget lacks direction for development of 100 smart cities, a pet project of Prime Minister Narendra Modi. “The budget did not provide any details on the initiative taken by the government for developing 100 smart cities. Factors such as how it will define these cities and which cities have been identified remain unclear. But increased allocations for rail-road development, penetration of education and training centres and push to Digital India initiative could contribute to the shaping of smart cities," Anuj Puri, chairman and country head, Jones Lang LaSalle.

Indiaproperty.com CEO Ganesh Vasudevan said “the budget’s objective was to improve the quality of life and pass on benefits to the common man. To an extent the Budget has succeeded in doing so. As expected the Budget mainly focused on growth of infrastructure, but it had no mention of smart city project."

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 28 Feb 2015, 06:06 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App