Mixed Reactions from Real Estate Sector: Budget 2021

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Finance Minister Nirmala Sitharaman presented her third and Narendra Modi government’s ninth Budget on Februrary 1, 2021. Industry leaders from various sectors like Real Estate, Construction, Retail, Co-Working, Developers and Building materials expressed their views and opinion on the most crucial and important budget of this unprecedent time. Dr. Niranjan Hiranandani, National President NAREDCO, commenting on the Annual Budget, said, “It is a get well soon type of Budget, the ‘V’ shaped recovery being powered by the Covid-19 vaccination program. Given the challenged scenario, the proposed annual budget has been largely positive, no major taxation enhancement is something that is welcome. As the Prime Minister pointed out last year saw mini budgets across the pandemic impacted time frame; the unsaid thing for most industries across the economy is that similar steps may happen with more positives in the offing. Continued focus on 'Minimum Government, Maximum Governance' will enhance 'ease of doing business', this government spending will provide stimulus for GDP growth, and is laudable.” Jaxay Shah, National Chairman CREDAI “The Indian Government has proved its mettle by presenting a landmark Union Budget 2021–2022, which majorly focuses on post-COVID revival of the Indian economy. It rightly prioritizes Healthcare, Infrastructure, MSME, Renewable Energy and Start-ups as the key drivers of India’s economic growth and prosperity. The key announcements have been well-received by most industry experts and thought leaders. The Budget is pro-citizen as the Indian Government has not levied any COVID cess despite the humungous Government spending to mitigate the impact of pandemic.” Pradeep Aggarwal, Founder & Chairman – Signature Global Group & Chairman - ASSOCHAM National Council on Real Estate, Housing and Urban Development, ““In Real Estate sector, Affordable Housing is set to get boost from the tax holiday being extended for one more year till March 31, 2022 and Rs1.5 lakh for interest paid on loans to purchase an affordable house being extended another year. The demand for affordable housing is at an all-time high, and we will focus on fulfilling it.” Kamlesh Patel, Chairman and Managing Director, Asian Granito India Ltd, "It is a growth oriented inclusive budget with focus on infrastructure, investment, MSME and health sector to revive growth on fast track. The measures are expected to give the right momentum to the economy in the medium to long term. Tax reforms and tax simplification measures especially reducing the time-limit for reopening of assessment to 3 years are steps in the right direction. Higher allocation to infrastructure, extension of exemption for the purchase of affordable houses till March 2022 and tax exemption to rental housing projects will provide necessary boost to the ceramic industry.” Manoj Gaur, CMD, Gaurs Group & Chairman, Affordable Housing Committee, CREDAI (National), “Though the number of announcements regarding the real estate sector was few, the sector is all set to gain from the measures taken to strengthen the economy through job creation and asset management. The players in affordable housing segment will get encouragement from tax holiday being extended for one more year; we would see more developers entering the segment in the coming year. The buyers also got benefit when the government extended Rs 1.5 loans to purchase affordable house by one year. But, the long standing demand of giving industry status to the sector has again been ignored.” Achal Raina, COO, Raheja Developers feels, “The developers needed measures that can help them in developing the projects on time such as help in loans from banks, single-window clearance, ITC benefit, etc. These topics were not touched upon by the FM and we expect that the government will take care of these soon. The FM has announced measures that might streamline the funds; the real estate sector need financing for incomplete viable projects, and we hope that banks will extend help to the realty sector.” Alok Saraf, Associate Partner. Grant Thornton Advisory Pvt Ltd, "FM had to do a tight rope walking with very limited elbow room for any big bang announcement given the over looming fiscal deficit. On an overall basis the #budget2021 was pragmatic, however, there were very limited announcements for the real estate sector. Markets have cheered that there was no new introduction of additional income tax cess which means the personal tax regime remains unchanged. The extension of income tax benefit by one more year for affordable housing for both developers and buyers will further support the demand for affordable housing." Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani, “The government has played a tough balancing act between providing demand impetus and keeping a watch on fiscal deficit. Though real estate has not got anything directly from this budget, there are announcements that will indirectly help the sector. We also hope that there will be more announcements soon to enhance ease of doing business for the developers and are optimistic that with green shoots in the economy in sight, the real estate sector is ready for explosive growth in the post pandemic era.” Sushil Mohta, Chairman, Merlin Group and President, Credai West Bengal, “We welcome the big picture of boosting the FDI, Ease of doing Business on the Tax administration and compliance. We expected necessary sops to the real estate sector to revive like reduction of GST on under construction projects and bringing back Input tax credit. We expected more liquidity to buyers to boost the consumption by raising the ceiling of the rebate on the home loan interest from Rs 2 lakh to Rs 5 lakhs. This could have proved to be a helpful measure to attract more and more customers to invest in properties. .” Manas Mehrotra, Founder, 315Work Avenue said that, “The Union Budget 2021 has predominantly focussed on revitalizing the rural economy which is a good move and this will act as a boost to the economy and increase demand in tier-2 and tier-3 cities as well. The budget could have had some specific measures for the coworking sector to enable its higher growth. However, the proposal to not have TDS on dividend is welcome. A positive is also dividend on receipt basis rather than advance taxes schedule which will enable shareholders to plan cash flows better. The extension of tax exemption and exemption on capital gains for start-ups by one year will help the start-up sector which will indirectly boost the coworking sector too.”