Realty seeks better deal in Budget 2019
Even as the Narendra Modiled NDA government is gearing up to present a vote on account budget on February 1 before the country heads to General Elections later this year, the real estate sector, a key driver of the countrys economic upswing and job creation, is seeking a better deal this time around besides demanding cut in GST on cement, a key ingredient for the sector
Hyderabad: Even as the Narendra Modi-led NDA government is gearing up to present a vote on account budget on February 1 before the country heads to General Elections later this year, the real estate sector, a key driver of the country’s economic upswing and job creation, is seeking a better deal this time around besides demanding cut in GST on cement, a key ingredient for the sector.
As a custom, an incumbent government at the Centre presents vote on account budget in an election year in order to allow the new government that assumes charge post the elections to present full budget. A constitutional requirement, such an exercise allows the central government to draw funds from the Consolidated Account of India. But expectations on this year’s Budget hit crescendo as speculation is rife that the Modi government may announce some lucrative sops in the upcoming Budget 2019 to outwit political rivals.
“Goods & Services Tax (GST) is very high on cement and other building materials. While cement attracts 28 per cent, the highest tax slab, several other materials including steel carry 18 per cent indirect taxation. There is an urgent need to rationalise the tax structure and bring down GST on key input materials that are required in building construction,” Gummi Ram Reddy, president, Telangana Chapter of the Confederation of Real Estate Developers’ Associations of India (Credai), told The Hans India.
He also demanded the government to reduce GST on under-construction flats. “Under-construction properties attract 12 per cent GST now. That leaves a huge financial burden on customers. Immediate efforts should be made to reduce this burden to 8 per cent with input tax credit facility. That way, the government can give huge fillip to the real estate sector,” Reddy felt.
The Credai Telangana chief also underlined the need for increasing tax exemption and standard deduction limits for individual tax payers. “The central government’s scheme of ‘Housing for All by 2020’ will become a reality if such measures are initiated,” Reddyadded.
C Rakesh Reddy, Director, Aparna Constructions & Estates, called for faster approval process for real estate projects. “Union Budget 2019 should expand the streamlined approval process enforced by RERA and implement Single Window Clearance. This will ensure project approvals to be processed more quickly, resulting in reduced construction costs, thereby substantially reducing property costs,” he said.
Shishir Baijal, Chairman & Managing Director, Knight Frank India, a property consultancy, demanded industry status for real estate. “Real estate is one of the major contributors to the economy supporting various ancillary industries and providing employment to millions directly and indirectly. Growth in real estate has a multiplier effect on the economy. Despite such strong fundamentals the government does not recognise real estate as an industry,” he said.
If real estate gets industry status, developers will be able to raise funds at lower rates and reduce their cost of capital which will eventually have a bearing on overall project cost, he added. On the expectations for Telangana, Ram Reddy, also CMD of Ark Group, said the central government should allocate funds for infrastructure projects like Regional Ring Road. “We have been hearing about National Highway from Bhongir to Chityal for the past seven years. Nothing concrete has happened so far. Hopefully, there will be some announcement on this in this Budget,” Reddy said.
Stating that expansion of MMTS network will ease traffic on roads in the City of Pearls, he said MMTS connectivity to Bolarum had been pending for the past several years. “In every budget, the central government talks about expansion of MMTS network in the city, but there is no visible progress. It’s high time that pending MMTS connectivity to Bolarum is taken up on war footing,” he said, adding further that MMTS network would not require large scale investments because existing railway network would be used for it. “If MMTS service is provided to Bolarum, IT employees can live there as they can reach Hi-Tech City from there faster,” he explained.