Finance Minister Nirmala Sitharaman will present the budget in the House. Along with businessmen and common people, the real estate sector will also keep an eye on the budget. The real estate sector has a lot of expectations from the budget. The real estate sector hopes that this time it can get the status of industry. Along with this, the limit of tax exemption on home loan is also expected to be increased.
Budget 2024: The first session of the third term of the Modi government has started. Now everyone is waiting for the budget session, it is expected that the first budget of the third term of the Modi government can be presented on July 22. Finance Minister Nirmala Sitharaman will present the budget in the House. Along with businessmen and common people, the real estate sector will also keep an eye on the budget. The real estate sector has a lot of expectations from the budget.
The real estate sector is hoping that this time it can get the status of industry. Along with this, the limit of tax exemption on home loans is also expected to be increased. For years, the Indian real estate sector has been playing an important role in driving the country’s economic growth. Amid the growing demand for housing, office spaces and commercial sector, the industry is expecting significant changes ahead of the Union Budget 2024-25.
However, despite the prevailing positive sentiments, challenges should also be considered. First of all, the sector has long-standing demands, such as granting industry status and setting up a single window system. Additionally, it demands government incentives to reduce prices for first-time homebuyers, making housing more affordable for the general population. What are the expectations of different sectors regarding the budget? Let’s try to understand this in detail.
Announcements expected on GST input credit too
Manoj Gaur, CMD, Gaur Group, Chairman, CREDAI NCR, says that the real estate sector has a lot of expectations from the upcoming budget. Firstly, we want the interest subsidy scheme to be restarted to revive mass housing. Secondly, we want to change the definition of affordable housing. The current limit should be increased from 90 sq m and Rs 45 lakh in terms of location and price. This will be an important step as there is a lot of demand in the affordable housing segment. Finally, we are also expecting announcements on GST input credit to encourage growth and make the real estate sector more robust.
Real estate sector should get industry status
MRG Group Managing Director Rajat Goyal says that one of the major expectations of the real estate sector from the upcoming budget is to grant industry status. It is the second largest employment provider in the country. Ahead of the Union Budget 2024-25, the main expectations of this sector include granting industry status and single window clearance system. The sector is hoping for the implementation of a single window clearance system and more support for affordable housing initiatives.
At the same time, Saurabh Upadhyay, MD of Trisol Red, says that the real estate sector is an important growth engine for India’s economy, giving industry status to the real estate sector is one of its major demands. This status will enable developers to get loans at lower interest rates and avail tax incentives and exemptions, which is an important support in times of economic recession. The sector has revived strongly in recent years and government support is necessary to maintain this momentum.
Reducing the input cost of steel, cement and fuel is important
Gulshan Group director Deepak Kapoor says that according to Niti Aayog, the Indian real estate sector is estimated to reach a market size of $1 trillion by 2030. The real estate sector is expecting favourable measures in the upcoming budget. Reducing the input cost of steel, cement and fuel is important. The current 28% GST on cement should be reduced. Additionally, there is a need to provide tax incentives to promote affordable housing and achieve the housing objectives of the nation.
Industry status and single-window clearance system
Nayan Raheja of Raheja Developers says that the real estate sector hopes that the government will take some policy initiatives in the upcoming budget. There are long-pending demands like industry status and single-window clearance, and we hope for positive action on these. There is also a demand to increase the deduction limit of principal repayment of housing loan under Section 80C from the current Rs 1,50,000. We hope that the budget announcements will further boost the prospects of this sector and increase its share in the country’s economy.
Contribution of real estate sector in India’s GDP is important
Ansal Housing Director Kushagra Ansal says that the contribution of the real estate sector to India’s GDP is estimated to reach 13% of India’s GDP next year, the sector hopes that the current budget will push its growth even further. Reduction in input costs is a major concern. The declining share of affordable housing and its huge demand is another challenging sector. This sector requires immediate intervention. Tax incentives with favorable provisions under capital gains tax for investors and concessions for first-time home buyers are some other initiatives that the sector would like to consider from the government.
Sanjay Sharma, Director, SKA Group says that we hope that the government will take steps to reduce the input cost of steel, cement and fuel. The GST on cement is currently 28%, which is almost one-third of the total cement cost, which is a major concern with regard to tax incentives. The sector is demanding concessions for home buyers, favourable provisions under capital gains tax investors and increased tax concessions for home buyers, among other things.
Beneficial steps will have an impact on the entire economy
Pyramid Infratech’s Ashwini Kumar says that despite the positive sentiments around the industry, challenges remain. The real estate sector is price sensitive and taxes on input items like cement and steel are still increasing the construction cost of the project. We request the government to look into this and also expect a single window clearance. Real estate is one of the largest employers in the country and any beneficial step for this sector will have a cascading effect on the entire economy.
Real estate is the largest employer in India
Ankit Kansal, MD, Exxon Developers says that real estate is one of the largest employers in India. While the industry is optimistic, we urge the government to address certain specific challenges. Granting industry status and implementing a single window clearance system are demands that have been pending for a long time. The declining availability and increasing demand for affordable housing is another important issue. Given these challenges, the industry needs immediate intervention from the government. In addition, we request the government to provide incentives for first-time homebuyers with the aim of reducing prices so that housing affordability for the general public can increase.
Prateek Tiwari, MD of Prateek Group, says that the real estate sector has not only emerged as one of the major employment providers and an important participant in India’s economic growth, but its share in the country’s GDP is projected to grow massively. Therefore, we expect the government to do its best to meet the long-pending demands of the real estate sector. This includes a single window clearance system and industry status. Meeting these demands will have a significant impact on the sector and will further boost the positive sentiments present in the market.
Sector expected to reach $1 trillion by 2030
Escon Infra Realtors MD Neeraj Sharma says that Niti Aayog’s prediction that the Indian real estate sector will reach a market size of $1 trillion by 2030 highlights its long-term prospects. The sector is expecting measures from the government to reduce the cost of steel, cement and fuel. Meeting the long-standing demands of industry status and single-window clearance system will help developers get loans at lower interest rates and avail tax incentives. These steps will give a huge boost to the sector and encourage further growth.
Shopping complexes and malls also have special expectations from the budget, regarding which Spectrum Metro Vice President Sales and Marketing Ajendra Singh says that ahead of the Union Budget 2024-25, commercial realty is hoping that government policies will coincide with the goals of promoting entrepreneurship. One of the main demands is that GST input tax credit should be available for commercial real estate. The 28% GST on cement, which is a major consumable item, accounts for almost a third of its total cost, which is a major concern. Hence, reducing GST on steel, cement and fuel, as well as implementing a single-window clearance system, will boost the sector.
Real estate sector is providing huge employment to workers
Amit Modi, Director, County Group, says that the real estate sector is a major employment generator of both skilled and unskilled workers in the country. However, ahead of the upcoming budget, there are a few issues that we request the government to pay attention to. One of the most prominent demands is to grant industry status to the sector which will benefit consumers, ensure timely completion of projects and implement a single window clearance to reduce costs.
Also, reintroducing GST input credit for residential real estate will stabilize costs. We expect the interest exemption on home loans for first-time homebuyers to be increased to Rs 8 lakh annually, and the principal deduction of home loans in Section 80C should be covered or its limit should be increased to Rs 5 lakh. We believe these steps will accelerate the progress of the sector.
How much does it contribute to GDP
Yash Miglani, MD, Migsun Group, says that the Indian real estate sector plays a vital role in boosting the country’s economic growth. It contributes 8% to GDP and is the second largest employment provider in the country. In terms of the Union Budget 2024-25, the major expectations of the sector include granting industry status and implementing a single window clearance system. Apart from this, there is 28 per cent GST on cement, which is about one-third of the total cement cost and is a major concern. Meeting these demands will boost the sector.
What is the demand regarding GST?
Harsh V Bansal, Co-Founder of Unity Group, says that commercial real estate needs policy support to match the government’s goal of promoting entrepreneurship, especially given the ongoing retail boom, infrastructure development and economic prosperity. An important issue is the GST framework. While building a mall, we pay GST on construction. However, once the mall is operational and we start collecting rent, we should be able to offset the GST paid during construction from the GST collected on rent. Facilitating this process will greatly benefit the sector.
Expect this measure from the government
Demand for government incentives for home buyers Piyush Kansal, MD of Royal Estate Group, says that before the Union Budget 2024-25, we expect the government to take measures to reduce the input costs of steel, cement and fuel. The 28% GST on cement, a key consumable, accounts for about a third of the total cement cost, making it a significant concern. Additionally, the sector wants government incentives to reduce prices for first-time home buyers, making housing more affordable for the general population.
