Mumbai : The realty sector has patted union Finance Minister Arun Jaitley for giving an impetus to the sluggish construction sector in the budget for 2014-15 presented Thursday.
Tata Housing managing director Brotin Banerjee said that several proposals are introduced to kick-start investments in the realty sector, necessary incentives to REIT (Real Estate Investment Trust) and a tax pass-through would reduce pressures on the banking systems, avail fresh equity and attract long-term finance from foreign and domestic sources.
“The additional thrust on infrastructure with development of new industrial corridors, ports, textile parks and improving connectivity between major cities will result in creation of new micro markets. Apart from this allocation of Rs.7,060 crore for 100 new smart cities will create demand for housing in the long term,” he said.
Initiatives like introduction of REIT, developing 100 smart cities and affordable housing will improve the health of the sector, and spur demand by 10-15 percent in the medium term, said RAK Ceramics COO Santosh Nema.
Puranik Builders MD Shailesh Puranik said an attempt is being to solve the issue of lack of housing stock by allocating funds to the National Housing Bank programme.
“The reduction in built-up area from 50,000 sq. mt to 20,000 sq. mtrs for projects and reduction in investment limit from $10 million to $5 million is a positive move,” he said.
Terming REIT commendable, he said that slum development will be recognized as a corporate social responsibility (CSR) activity, encouraging developers to fulfil CSR objective and create housing for the poor, he added.
“The development of new cities, national housing programme, low-cost housing through the NHB is sure to create massive opportunities for construction across the country, while the rebate on interest on housing loans is a positive aspect,” said Nahar Group vice-chairperson Manju Yagnik said.
Parsvnath Developers chairman Pradeep Jain said that after a long time, the housing industry has got some benefits and the government’s emphasis on public-private-partnership (PPP) shows a commitment towards collective growth.
“Allocation of Rs.7,060 crore for 100 smart cities will promote the sector on the global front as foreign investors were shying away due to ambiguity on rules, besides the incentives to give more purchasing power to the middle-class by various schemes,” Jain noted.
Shriram Properties MD M. Murali lauded the move to provide housing for all by 2022 and said that other realty-related measures and relaxations would go a long way in boosting the sector.
The moves like assurance to revive SEZs, 100 smart cities, planning metro cities with population over two million, etc are good, but said more encouragement could have given to the realty sector.
SARE Homes ED David Walker said the budget lays out a road-map for development with commitment to a stable and investor-friendly tax regime, resolving disputes and blocked projects, and other measures would attract long-term funds from foreign investors.
JLL India chairman Anuj Puri said that though the government has announced many low-cost housing incentives, demand-supply mismatch in the low income and economically weaker section housing segments, etc, in the past, the real task is the fast execution of these initiatives.
In the present budget, the proposals pertaining to Section 80C, deduction limit on interest payment for housing loans would lead to a vastly improved sentiment on the housing markets, though not enough measures are provided to bring down the construction costs which are rising at the rate of 17 percent in the past three-four years, he said.
Puravankara Projects Ltd Group CEO Jackbastian Nazareth said that the government should have conferred ‘industry’ status on realty, provided a single-window clearance and set up a regulatory authority to ensure planned and transparent development, among other things.
Foundation of Infrastructure Research Studies Training president Pratap Padode said that the budget has laid an infrasctructure tarpaulin and created a mood for growth, with allocation across the spectrum of infrastructure, manufacturing and social sectors.