Union Budget 2022-23: For the Indian real estate sector, the year 2020 was a testing year but it made a strong comeback in 2021. The sector has big expectations from the Union Budget 2022-23 which is scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1.
Most developers have high expectations from the budget and expect that it will provide a push to the residential segment as well as the rental housing. Many industry experts are anxious about the rising cost of raw materials and expect the government to intervene in this regard.
“Growth in the real estate sector is essential for the growth of the economy. We are hoping that the government will introduce deep policy reforms that will help in accelerating the growth in real estate, especially at this juncture,” said Aditya Kushwaha, CEO and Director, Axis Ecorp.
Kushwaha pointed out that the COVID-19 pandemic has played a significant role in changing the perception of home-ownership for all, especially for the NRIs.
In the last couple of years, the demand from the NRI segment has risen sharply. In order to encourage this segment, we propose that the government should consider revising the applicable tax deducted at source (TDS) on property transactions for NRIs, he said. “This will not only boost investment in the sector but also help our country to build its forex reserves. There has been an uptick in rental housing as people continue to work from anywhere (WFA). To further promote the rental segment, we propose that the government should offer taxation benefits for tenants which could include enhancement in HRA Tax Exemption,” Kushwaha added.
Vinit Dungarwal, Director at AMs Project Consultants Private Ltd said, “This year’s budget is crucial as the demand in the real estate sector, especially in the residential segment, has just started to witness a revival post the pandemic-induced slowdown. The continued intervention by RBI and holding on to the interest rates have helped in demand generation in the real estate sector and we are expecting the budget 2022 to also focus on aspects of demand generation.”
“We believe that the escalating prices of critical raw materials such as iron, cement can have an adverse impact on this growth momentum. The government should consider reducing GST on these to offset the price rise. Overall, we believe that the government should continue to focus on infrastructure and investments because that will help in generating jobs and lead to the economic growth of the country,” Dungarwal said.
Some experts have been demanding infrastructure status for real estate for some time and want this to be a reality in 2022.
Commenting on this, Anurag Mathur, CEO, Savills India, said, “At a time when the economy is anxious about recovery due to the Omicron threat, we look forward to a positive approach from the budget. In addition to agriculture, the focus is likely to be maintained on manufacturing, infrastructure, and the real estate sector in the budget. On the wish list will once again be infrastructure status for the real estate sector. It has the potential to unlock a host of benefits for boosting foreign as well domestic investment.”