Categories: Budget

Union Budget Reaction from Mr. Parth Mehta, Managing Director, Paradigm Realty

New Delhi, July 06, 2019: “Budget 2019 lacked luster as though NBFC crisis resolution was stated as agenda but was overlooked deeply. Allowing FII & FPI to invest in debt insecurities issued by NBFC as well as reinforcing the banks to purchase of high-rated pooled assets of financially sound NBFCs amounting to a total of Rs 1 lakh crore, whereby govt will provide a one-time six-month partial credit guarantee to PSBs for first loss up to 10%. This was only silver lining but not the solution to infuse liquidity and bolster credit to consumption finance. NBFC crisis needed major thawing. How much of it shall translate into construction finance for developers as well as revival of home loans market for retail home buyers is doubtful but definitely not enough to revive the beleaguered real estate sector. Also not giving real estate industry status was also disappointing which could have helped developers to raise cheaper finance. Deduction of interest hiked from Rs. 2 lakhs to Rs. 3.5 lakhs for loans taken in FY20 in case of affordable housing shall help the developers in extended suburbs of MMR region but definition of it being still capped at Rs. 45 lakhs and not revised upwards from MMR point of view is disappointing.

Turnover cap increased from Rs. 200 to Rs. 400 for corporate tax of 25% is breather to medium size real estate developers. The tax exemption to all income earners of annual Rs 5 lakhs shall boost inclination towards home buying again mostly in affordable segments of homes below Rs 50 lakhs. However surcharge increase of higher annual income people of Rs 2 crore onwards may discourage luxury sales further because tax rates would inch up to as high as 42.7% . Inclusion of stamp duty in GST purview was missed too. Thus overall no great stimulus to real estate sector was given in particular as withdrawal of ITC abolishment in GST and lowering of GST rates of primary input materials was one important point developers were scouting for in this budget to reincarnate their business.”

Corporate Comm India (CCI Newswire)

The Property Times News Bureau

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Tags: BudgetFII & FPIGSThome-buyingITCMMRNBFCParadigm RealtyParth MehtaThepropertytimes.in
7 years ago

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