Mumbai: Expectations from the Union Budget 2013-14 by Boman Irani, CMD, Rustomjee-
The real estate sector has been one of the major drivers of the GDP contributing almost 11% of the total GDP, but has suffered tremendously over the past few years due to higher costs, slow pace of growth, declining sales, difficulty in raising funds and stalled project approvals.
Currently, the sector is looking at certain key policy decisions which make home-buying a priority for everyone in the country. We hope that the government grants infrastructure status to affordable housing sector as it will help facilitate easy financing and address the housing problem to a large extent. Also, the one percent interest subsidy on home loans should be extended up to Rs 35 lakhs.
A reduction in the base rate is extremely important as it will enable banks to lower their lending rates thereby resulting in reduction of interest rates charged to developers and home-buyers. Government should also look at developing provisions for Special Residential Zones (SRZs) in order to incentivize housing stock.
Reduced taxation and simplified taxation by possibly introducing GST will be another welcome move. The Government can play a major role in incentivizing the real estate industry by bringing down the taxes which comprise over 35 per cent of the sale value. It will also significantly bring down prices benefitting the home buyer.
We are looking forward to a raise in the income tax exemption limit to Rs 3 lakh and a reduction in excise duty rates to put higher disposable income at the hands of the public.