The real estate sector is looking up to the forthcoming Budget with the Reserve Bank of India continues countering inflation which has affected the industry badly and wants tax boosts for low-budget housing, infrastructure spending and a streamlining of regulatory processes.
Last year the government allocated more than 48 percent of the total planned expenditure in the 2011-12 Budget for new projects out of which several failed to take off due to delays in approvals and decision making.
After an increase in the infrastructure spending the value of neglected land assets in suburban areas and other districts is also set to increase.
The government also needs to pay special attention to enhancing connectivity and implementing partnerships for infra projects.
In order to address the problem of acute shortage of houses in the country, Kamal Khetan, chairman and MD, Sunteck Realty, in an interview with Deccan Herald said affordable housing should continue to be a focus area in Budget 2012. “Rather than restricting it to unit sizes, as in the past to 1,000 / 1,500 sq feet per housing unit, the government could, instead, have a maximum per unit value of say Rs 15 lakh for units near Tier I cities, Rs 10 lakh for Tier II cities etc,” he said.
For banks to reach the common man the housing loans should also be made priority lending.
The government should allow foreign direct investment in multi-brand retail in Tier 2 and Tier 3 cities as it will not only provide a good source of much needed investments in the retail sector but also help in increasing employment and curbing inflation.
The forthcoming Budget should also introduce appropriate reductions in tax rates as nearly 35 percent of a home’s sale value consists of taxes like excise, VAT, service tax and stamp duty among other things. Finally, the real estate sector, which is a major driver of economic growth and contributes nearly 5 percent to the country’s GDP, should get an industry status.
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