Union Budget and Real Estate_Reaction by CREDAI NCR and Emaar MGF

New Delhi, Mar 05, 2015
MR. ROHIT RAJ MODI, PRESIDENT, CREDAI NCR:

“The budget presented today appears to be a well thought out roadmap for a cumulated economic growth. The Honb. FM has proposed measures to make the business environment easier for domestic as well as foreign corporations. However for the real estate sector in particular, it is disappointing not to get the long awaited ‘infrastructure status’. For a sector which is one of the largest contributor to GDP and second largest employer, granting infrastructure status would have boosted sentiments and would have allowed a window for cheaper long term loans.

We also expected Honb. FM would revise tax benefit limits on interest on Housing Loans to Rs 3 Lacs at least. Also, there is no clarity given by government on Sec 80 IB. Moreover, an increase in Service Tax to 14% would have an adverse impact and would put pressure on an already burdened sector. The hope this budget brings in for economy is the implementation of GST by 2016. We were hopeful that the government would make it applicable from this fiscal itself as implementation of GST would make business operations much easier and would help us get rid of multiple layers of indirect taxes. We are happy that government has announced formation of a legislator to make a single window for multiple clearances. However, whether housing projects come under its ambit is yet to be clarified.

The clarity on the (REIT) guidelines, is a welcome development by the Government. In the past, while the government moved forward to allow real estate investment trust (REIT)/ InvITs a realty in India, stakeholders were still waiting for taxation issue, which remained pending, before it took off in earnest. The tax incentives would now give much needed relief to the real estate sector, which is facing a huge slowdown in demand from last few years that had led to liquidity crunch and delay in completion of existing projects We do however hope that government would come out with guidelines for Smart Cities and Housing for All schemes at the earliest. Also, we hope it would reconsider our demand for the infrastructure status which would sort out the multiple problems that this sector is facing.”

MR. SANJAY MALHOTRA, CHIEF FINANCIAL OFFICER, EMAAR MGF:

“We believe the budget clearly shows the focus of our Government towards sustainable growth, investment in infrastructure, employment generation and skill development. The roadmap to where we want to be has been well defined. We understand the details of implementation shall be rolled out during the year.

Corporate tax regime has been given a clear direction of reduced tax rates balanced by rationalising exemptions over the next 4 years. The focus is to have a stable and non adversarial tax regime. Deferring GAAR by 2 years and making it prospective thereafter is a welcome step.

We also welcome Government’s focus on housing for All by year 2022. The removal of some of the tax deterrents for Funds and REITS are steps in the right direction.

Overall, the budget reflects the vision of the Government with emphasis on infrastructure development. It takes India forward on a path of inclusive growth, supported by steps that will make it easier to do business in India and a stable & non adversarial tax regime.” 
CCI Newswire