Govt. can play a major role in incentivising real estate

Boman Irani, CMD, Rustomjee, tells us about his expectations from the Union Budget 2013 with respect to the real estate sector - 

"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 that would make home-buying a priority for everyone in the country. We hope that the government grants infrastructure status to the affordable housing sector, as it will help facilitate easy financing and address the housing problem to a large extent. Also, the 1% interest subsidy on home loans should be extended up to Rs 35 lakh.

A reduction in the base rate is extremely important, as it will enable banks to lower their lending rates, thereby resulting in the reduction of interest rates charged to developers and home-buyers. The government should also look at developing provisions for Special Residential Zones (SRZs) in order to incentivise housing stock.

Reduced and simplified taxation by the possible introduction of GST will be another welcome move. The government can play a major role in incentivising the real estate industry by bringing down the taxes, which comprise over 35 per cent of the sale value. This will also significantly reduce prices, benefitting the home buyer.

We are looking forward to a rise 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."