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National: Developers seek favorable government policies

P. Chidambaram, the finance minister of India is likely to present a proposal during the budget session in the Parliament on February 28. Real estate developers in India are hopeful that the budget provisions might bring some positive changes in real estate sector by decreasing cost of finance for the realty sector. Developers are also keen that the government takes necessary steps to reduce the time taken to get several requisite approvals associated with developmental projects.

 

As stated by Lalit Kumar Jain, National President of the Confederation of Real Estate Developers’ Associations of India (CREDAI), “The finance minister should allow tax exemption for inputs used in construction of small houses, of under 60 square meter carpet area. Special housing zones on the lines of Special Economic Zones (SEZ) could also be created, with tax exemptions for constructing 45 square meter houses for low income groups and 30 square meter houses for the economically weaker sections.”

 

He further added, “Widespread tax incentives can be leveraged to make the real estate sector the new growth engine of the economy. It is high time that the government took a pragmatic and practical look at the real estate sector and took steps that help the industry in particular and the economy in general. Interest rates for housing loans should be cut to 7.5%.”

 

Anuj Puri, Chairman and Country Head – Jones Lang LaSalle India, a real estate advisory company, stated in an Interview with Dileep Athavale, Correspondent – Times of India, “The country’s real estate industry contributes approximately 5% to the GDP. Moreover, the real estate sector has grown significantly over the past decade, with tangible transformation in quality and business standards. However, due to lack of regulations and effective policies, the sector is experiencing many challenges. The budget must consider the fact that the Indian real estate sector generates countless jobs across its various verticals. By granting it industry status, the government would enable the sector to access debt-lending at better interest rates and reduced collateral values.”

 

Favista’s Views: If the expected changes are passed in budget session, it might play a vital role in country’s real estate development. Reduced finance costs and faster clearances are likely to reduce property prices. This is bound to be beneficial to end users and investors.

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