Real Estate Sector’s Expectation from Budget 2019
Jul 05, 2019 Real Estate News
The new budget will be presented on July 5, 2019, by the new finance minister Nirmala Sitharaman. Well, the focus area of this year’s budget might be the exports, manufacturing and agriculture, but there should be equal treatment for the real estate sector as well. Therefore, what the realty sector is expecting from Budget 2019, let’s understand.
Industry status and single-window clearance: these two are long awaited from the government. Approvals at multiple levels for a project result in its delay. Therefore, a single window clearance and an industry status will reduce the project timelines for the developers and help them get funds at better rates. Also, in the long run, this move will reduce the input cost of construction, finally making the product affordable to the end customers.
Government support to handle the liquidity crunch: liquidity constraints is one of the significant factors that is doing significant damage to the realty companies. The need of the hour is quick corrective steps by the government and apex bodies to pump inadequate liquid into the system to bring the sector back on track. The industry has also been asking for stress funds for those companies who are not able to complete their projects due to lack of funds.
PMAY and Rental housing: well the beneficiaries of PMAY are quite happy for the re-election of the government, but the speed of PMAY implementation is not as expected. Moreover, India needs to have robust rental housing like the developed countries to move towards the house for all at a faster pace, so that everyone has a roof over their head.
Co-working spaces: looking at the increase in the number of co-working spaces, realty sector expects the government would enable the industry to claim input credit on contracts and construction services supplies according to the GST provisions. This would keep a check on the increased cash outflow experience by the co-working firms. The companies are expecting that the input tax credit under GST gets extended to developers so that further it gets passed on to the firms who rent out space, reducing the overall costs. This would also boost the growth of the co-working business in the country.
Industry status and single-window clearance: these two are long awaited from the government. Approvals at multiple levels for a project result in its delay. Therefore, a single window clearance and an industry status will reduce the project timelines for the developers and help them get funds at better rates. Also, in the long run, this move will reduce the input cost of construction, finally making the product affordable to the end customers.
Government support to handle the liquidity crunch: liquidity constraints is one of the significant factors that is doing significant damage to the realty companies. The need of the hour is quick corrective steps by the government and apex bodies to pump inadequate liquid into the system to bring the sector back on track. The industry has also been asking for stress funds for those companies who are not able to complete their projects due to lack of funds.
PMAY and Rental housing: well the beneficiaries of PMAY are quite happy for the re-election of the government, but the speed of PMAY implementation is not as expected. Moreover, India needs to have robust rental housing like the developed countries to move towards the house for all at a faster pace, so that everyone has a roof over their head.
Co-working spaces: looking at the increase in the number of co-working spaces, realty sector expects the government would enable the industry to claim input credit on contracts and construction services supplies according to the GST provisions. This would keep a check on the increased cash outflow experience by the co-working firms. The companies are expecting that the input tax credit under GST gets extended to developers so that further it gets passed on to the firms who rent out space, reducing the overall costs. This would also boost the growth of the co-working business in the country.
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