The Confederation of Real Estate Developers’ Associations of India (CREDAI), the apex body for private real estate developers in India is feels that the sector has not got the desired position of importance in the budget for the fiscal year 2015-16. The Real estate sector was expecting that the Modi Government, like last time, would extend the support to this vital sector and iron-out the difficulties faced by the real estate sector to ensure a positive contribution to the development of the country, by providing jobs and achieving the mission “Housing for all by 2022”.
Speaking about the budget Mr. C Shekar Reddy, National President, CREDAI said, “The Budget quite disappointing for the real estate sector as Budget has not given any impetus to the sector. The sector provides much needed employment, which is the need of the hour, yet, the only provisions in the Budget for the real estate sector is the pass through tax for investments in the Real Estate Investment Trusts (REIT’s) and rationalization of the capital gains for the sponsors exiting at the time of listing of the units of REITs and InvITs. The Government has allocated Rs. 22,407 Crores in the budget for Housing & Urban Development. The government envisages a plan to construct 2 Crore houses in rural India, 4 Crore houses in the urban areas towards achieving housing for all by 2022. It is not clear how these targets will be achieved.”
Mr. Reddy added that, “Moreover our demand for infrastructure status to the affordable housing, home loan interest rate subvention schemes to enable affordability for housing and propel the demand for affordable housing (houses below 80 sqm) has not been heeded to. These along with the adoption of liberal FSI norms were critical to drive the affordable housing demand and supply to achieve ‘Housing for all by 2022’. To top it all, contrary to our demand for removal of service tax on affordable housing, the service tax has been increased from 12.36% to 14% adding to the cost of houses. Their was a requirement of a special package for the affordable housing segment. ”
He further added, “Now we look forward for initiatives from RBI to reduce the overall rates to stimulate the demand for housing. We strongly recommend the government to come out with a special stimulus package to boost the affordable housing segment to meet the existing housing shortfall and achieve the objective of ‘Housing for all by 2022’. We are also looking forward for the government to streamline the approval process which will enable the ease of doing business.