THE SARKAR RETURNS
The larger than life projected image of Modi backed by the hard work of party workers and the hunger to win ensured the coming back of Modi Sarkar. Here’s what the real estate leaders had to say about Modi’s victory Text: SAPNA SRIVASTAVA The hurricane Modi swept the nation with BJP winning the Indian General Elections with a landslide margin, upping the previous elections seat count. The resounding victory of the BJP led coalition in 2019 election represents a focus on the personality of one leader than the party itself. Presenting a different opinion, ShwetaShalini, Advisor, CM Maharashtra & Govt. Policy Expert & Executive Director, Maharashtra Village Social Transformation Foundation, Govt. of Maharashtra stated that while, the opposition, media and many other made this election about Modi, they failed to grasp the mood of the nation. “The country gave BJP a second chance as the people wanted stability. They wanted speed, skill and scale which BJP had shown during its previous term. The re-election of the ruling party with majority will also give the right signals to foreign investors, indicating steadiness and continuance of policies.” Commenting on the real estate industry that has seen a lot of changes in the first tenure of the Modi Government, ShwetaShalini assured of strengthening of previous reforms, working on the initiatives introduced in the interim budget and continuing the push towards affordable housing. “While, the government will continue to work for the benefit of the real estate buyers and add more beneficiaries under its various schemes, it is also ready to support the developers that are willing to work in a transparent manner. The government will take ahead the on-going and new plans that need to be accentuated and initiated for a promising future of Indian real estate industry,” she said. Amit B. Wadhwani, Co-founder, Sai Estate Consultants expecting government to bring about the much-awaited Industry status, single window clearance and access to institutional credit moving forward said, “Building physical infrastructure for a 10 trillion dollar economy with the government’s support will boost the country beyond. The sector also expects institutional investments in the sector to double to $10 billion in 2019. The clear policy direction & ease of doing business will not only bring foreign direct investments but also create the environment of more sales.” Dr.Niranjan Hiranandani, National President, NAREDCO expressing his views on the new government said that the industry is hopeful that the government will redress and resolve the prolonged issue of liquidity crisis that the sector is facing currently. Moreover, rationalizing the taxes by subsuming stamp duty under GST will grant a big relief to the home buyers. “We highly recommend the National Housing Policy to boost rental housing in order to fulfil the ambitious target of Housing for All by creating surpluses.” HOPES OF REALTY REVIVAL With Modi 2.0 underway, several developers have raised the bar of expectations as the economy is expected to boost facilitating more foreign funds inflows in the country. With a stable government at the centre the realty industry is expected to see a new hope of light going forward. NavinMakhija, Managing Director, The Wadhwa Group feels, more focus is needed on completion of on-going infrastructural projects which will benefit the affordable housing and boost residential realty. SubodhRunwal, Director, Runwal Group believes that this is a vote for development and particularly for the real estate industry. “I am hopeful that the government will make housing affordable in all major metros by reducing the taxes, premiums & GST levy by the Government and will also infuse liquidity into the banks & NBFCs dealing with the real estate sector.” Concurring to the positive note, VikasOberoi, CMD, Oberoi Realty Ltd. said, “The country has already gained from PM Modi’s earlier reforms like GST, RERA, insolvency code and all other similar initiatives. Given the political stability and the fact that India is a growing market there will be no dearth of private investment for India Inc. from across the world.” Expressing positivity, Pradeep Aggarwal, Founder & Chairman – Signature Global India Pvt Ltd and Chairman – ASSOCHAM National Council on Real Estate, Housing and Urban Development stated that in many years, a government had shown inclination towards paying heed to demands of the sector. GST and RERA are the two aspects that were ignored for quite a long time. The government has shown that it has good intentions to fulfil the vision ‘Housing For all by 2020’ and that it is not only a slogan. BabulalVarma, Managing Director, Omkar Realtors expects that there will be newer reforms and policy for added transparency to get the sector back on a fast track. “We are confident that the new government will look into this double taxation issue,” he said. Sanjay Dutt, MD & CEO, Tata Realty & Tata Housing hoped that with the stability in the Government, investments will increase and Private Equity playing a larger role. “The Government is aware of the sector’s challenges and we expect some immediate relief and announcements. We believe, customer will remain the king and benefit the most.” Overall, the realty sector expects the new government to emphasize more on re-energizing the reforms related to infrastructure investment, land acquisition reforms and speeding up the regulatory functions of the state. The sector had slowed down since the sequential jolt of GST and demonetization. The developers are now looking at measures to expedite the environment clearances for the new projects which take 2 to 3 years, a better clarity over the rules for infrastructure projects and stability in the regulatory norms without too many changes. THE GOVERNMENT INHERITS MAJOR ISSUES Electoral victory was probably the easy part. The real estate is grappling with stalled or delayed housing projects, liquidity crisis of developers and a massive pile-up of unsold stock across cities yet unaffordable property prices for the largest part of the Indian population. It needs a shot in the arm by way of improved liquidity, fiscal discipline with stimulus, and resolution of stressed projects. Clearly, funding has become a major concern for the developer’s fraternity. After the RBI guidelines associated increased risk with lending to developers, most of the banks have discontinued this practise. Even the NBFCs’ are drying up which can become a major issue pertaining liquidity in the industry. Ram Walase, MD and CEO, VBHC expressed, “Strong majority for the NDA Government is a great thing for the policy continuity and stability. Revival of NBFCs and core sectors, acceleration of housing growth and employment generation should be the priorities for the government”. The win of BJP is a reflection of India wanting sustenance, accountability and growth. It reinforces the belief that India is on the Global map and citizens of India want this transformation. “With the same government in power we expect further consolidation in the realty industry and possibility of better business and progress. Also, many infrastructure projects went live in their tenure and we are therefore positive about further growth in the real estate industry,” added Ashok Mohanani, Chairman, Ekta World. Vice-President, NAREDCO Maharashtra Rohit Kapoor, CEO, New Real Estate Business, OYO Hotels and Homes feels “The overwhelming mandate is an endorsement of the pro-reform policies implemented so far. Especially true for the real estate sector, which is labor and capital intensive and creates lakhs of economic opportunities. “With the increased participation of the youth and especially women in the electoral process, the opportunity to also address the aspirations of the ‘co-living and co-working generation’ is immense,” he suggested. Nimish Gupta FRICS – MD, South Asia – RICS, firmly believes “The Modi government in its second term will lay greater emphasis on enforcement and implementation of the reform and regulatory mechanisms it set in motion in 2016. “We need to work towards streamlining our approval mechanisms and considering establishing a Construction Regulatory Authority (CRA) to create a fair and level playing field for construction activity to flourish. We also need to ensure that different regulatory mechanisms talk back to each other in order to aide cash flows in the sector. This can be facilitated, bearing in mind the Digital India mandate, by technology and other platforms that are available.” MODI 2.0 DELIVERING ON THE ECONOMY Once the euphoria over the victory is over, BJP and its coalition will have to strategize to address widening fiscal deficit. “The government should not fritter away its political capital, but push ahead with projects that could generate jobs and boost the local economy, as per R Nagaraj, Economist at the Indira Gandhi Institute of Development Research. Many also hope the government will formulate a new industrial policy to raise manufacturing sector’s contribution to GDP that has stagnated at 15 per cent for the past five years. WHAT TO EXPECT IN MODI GOVERNMENT’S 2ND TERM? On return to power, Modi government may consider more relief for taxpayers in the main budget. It is likely that in its second term, the Modi government may replace the existing Income Tax Act. The Modi government Bill to amend the Aadhaar law to allow the Aadhaar card holder to voluntarily use Aadhaar for KYC purposes will most probably get cleared by the RajyaSabha. The BJP government’s last term saw various tweaks in tax rules and check on cash transactions which may continue given the return of the government to power. The maximum investment allowed under Pradhan MantriVayaVandanaYojanan to Rs 15 lakh per senior citizen may be extended further. There is a probability of extending the time period of the CLSS scheme for home loans for MIG ending March 2020 to 2022. Promotion of digitisation of financial transactions to make India ‘cash-lite’ is expected to continue. The Modi government’s return to power is also expected to set at rest any fears that the laws made in its interim budget 2019 may be rolled back. The introduction of a national value-added tax (VAT) system and new bankruptcy courts has helped raise India’s position on the World Bank’s Ease of Doing Business rankings by 65 places in four years. International markets have responded positively to the BJP win, expecting a period of political stability that will enable progressive economic reforms. At the home ground, BJP re-run is being looked upon as a sign of bolder reforms during the next five years. One of the election pledges of the party was a promise to spend $1.44 trillion to build roads, railways and other infrastructure. To achieve such an ambitious target, privatisation will play a key role.
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