Budget 2020-21 : Let’s Focus On Some Specific Issues For The Real Estate Sector
Some meaningful measures taken by the Government has brought a lot of relief to the real estate sector in the country.
Few of which include :
1. Alternative Investment Fund (AIF)
2. Rationalizing the Goods and Service Taxes (GST)
3. Support for NBFCs
However, there are still some issues that need focus pertaining to the real estate industry. Here are some of them.
1. Real Estate Investment Trust (REIT)
The earlier budgets have seen the Government taking measures to provide incentives, but the listing has been only for the Real Estate Investment Trust (REIT) so far. To push this agenda and to reduce the timeline for investment from three years to one year can bring a lot more relief to this sector.
The development of infrastructure is another key area that needs attention. It’s time for the Government to take initiatives and develop the infrastructure which will on the other ensure better affordability and lower the costs of housing. The Government has planned to invest INR 102 trillion on infrastructure in the coming years which is like a ray of hope and immediate implementation of the plan will surely boost the economy as well as the real estate industry.
3. Section 80 C - Deduction on the principal repayment of housing loans
The Income Tax Act, Section 80 C does not offer any focused benefit on residential. Though taxpayers can choose from various investment plans, the lack of tax benefits on home loans makes them take a step back from their decision to invest in their dream home. An annual deduction of Rs 1, 50,000 for principal repayment will provide the pushto opt for home loans as well as boost the housing sales.
4. NBFC Liquidity Crisis
The capital crunch in the Non-Banking Financial Companies(NBFC) has had a negative impact on the real estate industry. In the last four-five years NBFCs had been the primary money lenders for almost all the builders. But their struggle now to raise capital has become a serious issue as they are not even being able to fulfill their prior commitments which include financing for many construction and under-construction projects. Here is where the Government needs to take some immediate measures and improve the crisis faced by the NBFC sector.
The second-largest sector of the country needs more attention from the Government so that it can go back to the position it was a few years back.