The real estate industry is the biggest job generator after agriculture. The real estate market is predicted to grow at a whopping 9.2 per cent between 2023 and 2028 in cities, thanks to rapid urbanisation and higher incomes.
The sector is pinning its hopes on the Budget to provide fiscal stimulus to the capital-intensive industry. Increasing the exemption limits on interest on rental incomes and home loans can potentially increase the demand for home loans. 100 per cent exemption for rental income up to ₹3 lakh for houses costing up to ₹50 lakh will also encourage individuals to invest in the affordable housing sector.
The industry is hopeful that the government will curb the steeply rising commodity costs, particularly for steel and cement and also reduce the GST slabs. In addition, lower GST slabs, at 1 per cent without ITC will be far more beneficial for homes qualifying under affordable housing.
With increased interest by NRIs to invest in India, the industry is also hoping for a reconsideration of the applicable TDS rates for NRIs in particular.
To boost infra growth, the government must also consider increasing the tax deduction limit from ₹2 lakh to ₹5 lakh to attract untapped markets involving first-time buyers.
The government had also previously announced the opening of 35 Multi-Modal Logistics Parks across the country, as centres for freight aggregation and warehousing. Simplifying and streamlining this process will bring in more investment into MMLPs.
The process of acquiring necessary approvals must be consolidated under a single window clearance system to fast-track development.
Allotting a special State-wise task force with real estate experts will help the States periodically review their projects and fine-tune policies.
Every State has a different stamp duty in compliance with its State rules and regulations. A common stamp duty policy across the country will maintain transparency, increase buyer and developer confidence, and boost investments.
Cut logistics costs
The industry hopes to get better tax benefits and incentives to boost the sector and live up to the “Make in India” promise. Bringing logistics costs down to 10 per cent of GDP will help the sector compete with its international counterparts.
While Budget 2023-24 may be the last full-year Budget ahead of the 2024 elections, with a global recession and slow post-pandemic growth on the horizon, strategic incentives to both the home owners and the industry are the need of the hour for the upcoming financial year.
Pillai is Partner – Corporate Real Estate and; Ulbyre is Senior Associate; at Cyril Amarchand Mangaldas