Construction workers erect structures at the site of an upcoming residential complex in Mumbai Photograph:( AFP )
Apart from the sector suffering a sharp dip in sales due to COVID-19, there was also an exodus of migrant labourers from cities which impacted the execution of projects
There is a lot of anticipation from the Union Budget 2021 that will be presented by Indian Finance Minister Nirmala Sitharaman on February 1.
The real estate sector, which took a hard hit due to COVID-19, is pinning hopes on the Union Budget to be presented on Monday for easing regulatory norms and for steps which will help in completion of pending projects and sale of build-up houses.
The sector has also been demanding infrastructure status. Apart from the sector suffering a sharp dip in sales due to COVID-19, there was also an exodus of migrant labourers from cities which impacted the execution of projects.
Developers said construction work had not picked up projects due to liquidity crisis.
Navin Raheja, Chairman, Raheja Developers, said the real estate sector is the driver of the economy and a boost to the sector will have a trickle-down impact.
"People on average invest their one-third of their savings in real estate. The real estate sector is largely suffering due to over-regulation and incomplete projects that has led to delays and defaults. Though the government has put the system online, developers still need to approach 50 departments for approvals.
This needs to be taken care of. There should be restructuring of the past loans to complete the projects," he said. R K Arora, Chairman Supertech Group and President NAREDCO-UP said he is expecting that a stimulus package will be announced by the government to increase the purchasing power of the common man which will create demand in the market.
He said if the real estate sector gets industry status, it will ease getting financial support from banks and financial institutions at reasonable interest rates."The last-mile funding to complete ongoing projects of existing lenders by allowing them restructuring existing loans is also urgently required to complete these projects as SBICAPS will take many years to finance the stalled and under-construction projects through the stress fund announced by the central government," Arora said.
Prashant Solomon, Managing Director, Chintels India, suggested extension of the CLSS scheme for the next fiscal, increase in tax incentives for home buyers, infrastructure status for real estate sector and abolishing the tax on unsold homes.
"States on their part must cut stamp duty on registration of properties, as Maharashtra has done. If the government announces some positive measures on the demand side in the budget, housing sale will bounce back to reach the pre-COVID level," he said.
Neetish Sarda, founder of the co-working space company Smartworks, said that the pandemic has accelerated the need for flexible office spaces and the co-working market is poised for growth with new entrants.
He said they are keen on new or reduced TDS bracket for service payments to co-working spaces."We hope the budget would also allocate more funds towards IT infra spending as we believe technology and digitization are the way forward for commercial real estate and co-working segment in particular," said Sarda.
"There is a need for industry status, single window clearance and reinstatement of Input Tax Credit in GST. We look forward to a stimulus to investments in commercial real estate in the budget which will provide a significant fillip to growth, create jobs and spur demand. The government should provide for allowance of capital expenditure incurred by the companies in the co-working segment," he added.