Nothing for realty in the Budget: Industry

Ajit John

PANJIM: The budget was presented by the FM Arun Jaitley on Saturday. Industry, nation-wide, looked to him for a bit of magic that would perhaps help generate some momentum for them in a market that has been depressed. The business of reality was one such industry looking to the FM for him to work his magic. More so in Goa where the sales of apartments across various price points has witnessed a drop. The budget however seemed to have disappointed builders in the state. 

Desh Prabhudessai , President of the Goa unit of Credai had much to say about the budget. Speaking to the Herald he said the promise of housing for all by 2022 with every Indian having a roof over the head with proper sanitation facility and unhindered supply of electricity was a very good idea.  He felt it was a Make in India budget but with regards the real estate sector, major issues like taxes, request for single window clearance remain untouched. 

The budget, he complained yielded absolutely nothing on any front for the real estate industry. Only a minor concession he felt was the Real Estate Investment Trusts, which allows pass through of rental income for income tax purposes and projects a regime for capital gains tax on them. He went on to say that the only consolation was that there were no provisions in the budget that were adverse for the industry. With regards the service tax he said it had gone up from 12 % to 14%. He also mentioned that the corporate tax would be reduced from 30% to 25% over the next four years was a nice move.

The real estate sector, he said was reeling  under the economic slowdown, inventory had accumulated due to oversupply, high interest rates and sluggish economic growth. The availability and prices of fundamental construction materials like sand, cement  stone aggregate, bricks have  further intensified to make the sector more bleak. He however hoped that the Goa government would boost the sector and put an end to the apprehensions that has been affecting the industry. 

Deep Karapurkar, CEO, Cityscape Developers felt the increase in service tax will put further burden on the home buyer. “It is bad for the already tottering real estate industry,” he said.

Edwin Menezes of Edcon Real Estate Developers however saw the positives. He said “Overall it is an excellent budget and is bound to help revive our economy. There is a good fund allocation for infrastructure which indirectly impacts our industry. I am also happy to note that the corporate tax is proposed to be reduced to 25%. There is a lot of clamour that the budget is pro corporate, but we needed this to give a boost to industry.”

Another major player in the state Rohit Gera, MD, Gera Developments said the “Overall the budget is certainly positive but it is not a super Big Bang budget. The budget has completely ignored the residential real estate market and there is a total lack of any push for the housing sector. We hoped for increased deduction towards home loans amongst other things to give an impetus and augment growth of the industry”.

He went on to say that the proposed additional investments in infrastructure will further improve the economy and this will definitely have a trickle-down effect on customers who will eventually buy homes.

The move to eliminate black money both within and outside the country is a very welcome move. The elimination of wealth tax and replacement with a small surcharge was also positive steps. The thrust towards a social security economy as well as the priority to address the unbanked, unfunded and uninsured is optimistic. He felt the reduction in corporate tax is encouraging and the intelligent-new projects wanting to Make in India will see the benefits arising out of this as they start earning income. This he felt would augur well for the industry and was progressive. 

Perhaps time will tell how true these apprehensions turned out to be.