Union Budget 2024: Real Estate sector needs to be prioritized

Source: Business Today

In the upcoming Budget, prioritizing the real estate sector is imperative for several compelling purposes. First and foremost, the real estate industry serves as a fulcrum in India's economic growth, contributing significantly to employment generation, GDP, and overall economic development. By allocating resources and implementing favorable policies, the government can catalyze this sector, fostering job creation and stimulating economic activities. 

The real estate sector is on the brink of anticipation as Union Budget 2024 approaches, with high expectations for comprehensive measures shaping the industry's future. Stakeholders eagerly anticipate transformative changes across various facets: 

Grant of Industry Status: Stakeholders fervently anticipate the long-overdue grant of Industry status to the real estate sector, recognizing its pivotal role in India's economic growth. This status is seen as a catalyst for increased investments and streamlined regulations, fostering an encouraging environment for sustainable and robust development of the entire industry.  

Single Window Clearance: Nowadays more than 30 approvals are required form various state and union government authorities for a real estate project. Simplifying bureaucratic processes through a single-window clearance system is most crucial and substantial, aiming to expedite project approvals, reduce delays, and enhance overall efficiency in project execution. 

GST Input Tax Credit Rules should revise: Despite reduced GST rates on residential and affordable housing, the absence of input tax credit under these rates hinders developers' ability to offset taxes, impacting overall project costs. We appeal for a unified GST and solution for claiming input tax credit for all construction materials, anticipating a reduction in property prices and greater transparency in the process. This measure is seen as a catalyst for fast-tracking projects that suffered due to cost overruns. 

Increased Home Loan Interest Rate Rebate: Government should emphasize stimulating the housing market by revising the Income Tax Act Section 24's home loan interest rate rebate. The proposal calls for an increase to a minimum of ₹5 lakh, aiming to attract genuine homebuyers and significantly boost demand. 

Enhanced Financing Environment: Developers seek a more conducive financing environment with streamlined processes and increased support from financial institutions. Policies encouraging smoother access to funds are expected, promoting sustainable and long term growth within the sector. 

Policy Interventions for Sustainable Development: We hope for policy interventions promoting sustainable development, encouraging foreign direct investment, and streamlining regulatory processes. A well-crafted Budget is expected to stimulate demand by offering incentives for both homebuyers and developers, creating a harmonious ecosystem for the real estate sector. 

Friendly Home Loan Policies: Reflecting on recent repo rate revisions by the RBI in the last year, experts note the impact on borrowers facing higher interest rates on home loans. Calls for decreasing the down payment burden and easing home loan eligibility criteria aim to make credit more accessible, encouraging a positive trend in home-buying. 

Infrastructure Focus in Urban Cities: A shift of focus towards urban infrastructure development is sought, aligning with the need for sustainable and well-connected urban centers. Expectations include increased allocations for infrastructure projects to drive real estate growth in urban areas. 

Stamp Duty Reduction for Property Registration: To support the mid-income and common man, stakeholders hope for a reduction in stamp duty rates for property registration, making property transactions more affordable and accessible.

Inclusive and Fast-Track Land Acquisition and CLU Process: Industry players are optimistic about reforms making land acquisition and Change of Land Use (CLU) processes more inclusive and fast-track. These reforms aim to reduce project timelines and minimize uncertainties. 

Supporting the real estate sector aligns with the government's vision for urban development. Adequate funding and policy emphasis can spur infrastructure growth in urban areas, ensuring well-connected, sustainable cities that enhance overall quality of life. The modernization and development of urban centers are essential components of a forward-looking national agenda. In nutshell, giving preference to the real estate sector in the upcoming Budget is an investment in India's economic resilience, job creation, and sustainable development. It aligns with the nation's aspirations for inclusive growth and addresses critical housing needs, thereby contributing to the overall well-being and progress of the country. 

The real estate sector looks forward to transformative measures that will invigorate the industry, address the diverse needs of both developers and homebuyers, and contribute to India's economic growth.