Sumit Jain, Co-founder and CEO, CommonFloor.com

Amidst several speculations and high expectations, finally the maiden budget of Modi government was unveiled. Infrastructure development being the forefront of the new government’s agenda in order to propel economic growth found place in the budget. Ambitious projects such as Lucknow metro, National Industrial corridor, allotment for 16 new port projects and SEZs will significantly boost the sector. Emphasis on PPP shows the government’s commitment towards a collective growth. Allocation of Rs 7,060 crore to develop 100 smart cities is certainly going to promote the sector on global front. Interestingly, initiatives that had helped Gujarat climb the growth ladder seems to have been replicated in the Union budget. Riverfront development is just one example. Allocation of Rs 8000 crore for rural housing and Rs 4000 crore for urban housing for poor and EWS will support PM’s ambition of Housing for all by 2022. Further, the decision to give necessary incentives for real estate investment trusts (REITs) is also much appreciated. Though, it would be given a tax pass-through status to avoid double taxation, it lacks clarity on whether DDT or capital gains on transfer of assets to REITs is exempt. The reduction in built up area from 50000 sq mtr to 20,000 sq. mtr, and minimum capitalization from 10 million to 5 million will spur a lot of foreign money into Indian real estate sector, which in turn will increase the avenues for growth. And with raised housing loan rebate from Rs 1.5 lakh to Rs 2 lakh, home buyers got a reason to celebrate too. All this together will increase a lot of demand in the real estate sector. People who have been patiently waiting on the fence might finally take an entry into the market.

Abhay Kumar, CMD, Griha Pravesh Buildteck Pvt Ltd

“Real estate sector has been asking for strong and clear policy measures that will bring in more transparency and growth opportunity. The Budget’s intent to provide necessary incentives to REITs will help the real estate industry to achieve pass-through that will bring clarity in taxation and it will also enable the developers to attract long-term funds from foreign investors. The moves to promote affordable housing through allocation for Rs 4000 crore allocation and Rs 8000 crore for national housing banking programme provides a comprehensive platform for this segment of real estate to instigate sustained PPP growth model. Moreover, the allocation of a massive Rs 50,000 core towards urban infrastructure will pave the way for overall growth of the real estate sector. However, all said, we are slightly disappointed that the Government did not consider giving a separate infrastructure status to the sector - a move which would have been a springboard of sustainable growth for a sector which already contributes 6.3 per cent to the country’s overall GDP.”

Getamber Anand, President (elect), CREDAI and CMD, ATS Group

"The industry overall appreciates the Finance Minister for presenting a very comprehensive budget wherein he has tried to address the needs of varied sectors along with the measures to control fiscal deficit. For the Real Estate industry, we specifically appreciate his following efforts – · Increasing the limit of income tax rebate on the housing loan from Rs 1.5 lakh to 2 lakh · Foreign Direct Investment in Real Estate will become more robust with the limit of construction being decreased · Incentives for Real Estate Investment Trusts (REITs) will pass on, means it will avoid double taxation of both corporate tax and dividend distribution tax. The best part of this budget is, however, the promise of FM that he will look into various recommendations of the housing industry which is very encouraging because even after what has been done till date, there are pending requirements to achieve ‘Housing for all by 2022’. We hope the FM will once again engage the industry with him in the discussion on what can be done to achieve this figure. Moreover, we also appreciate the fact that the budget has allocated sum of Rs 4,000 crore for NHB for low cost housing and affordable housing, I hope this step will be translated into providing the cheaper finance in the form of home loans to the retail buyers in the low-cost and affordable housing segment. All in all, it’s a good budget and we’ll rate it with 7 on 10 and hope to interact more and more with the FM in the direction of achieving the goal of housing to all by 2022."

Pankaj Bajaj, Managing Director, Eldeco Infrastructure & Properties Ltd.

"The fiscal constraints have limited the scope for any large concessions for the real estate sector in the Budget 2014-15. The rebate on interest paid on home loans has been raised by 50,000 rupees to Rs 2 lakhs per annum while exemption under section 80C has also been raised to Rs 1.5 lakh. This means that home buyers can also utilize the higher limit under 80C to account for the principal repayment. These measures, though welcome, will have marginal impact in the demand for middle class housing the top cities of the country. Given the government’s commitment to fiscal discipline, we now expect the RBI to start gradually reducing interest rates and a combination of tax incentives and lowering home loan rates will surely give a much needed fillip to housing sector. A beginning has also been made in the area of low cost housing with the budget setting aside Rs 4,000 crore under National Housing Bank. We now need more details on how this money will be used but given that India needs 25 million more dwellings, the scope for low cost housing is immense. The biggest disappointment is that the housing sector has not been given infrastructure status nor has the erstwhile section 80 I(B) for tax breaks on affordable housing been reintroduced. They are no direct breaks for housing in this budget. The sector will have to depend on an upswing in the overall economy for things to start moving again."

R.K Arora, CMD, Supertech Ltd

While presenting the Union Budget, the Finance Minster has tried to maintain the balance and aim to bring fiscal deficit low to 3.6 for FY15-16 and retaining it to 4.1 per cent for current FY14. An incentive for affordable housing loans of Rs 4,000 cr was announced for urban poor and weaker sections of society through National Housing Bank (NHB), this will certainly set momentum in real estate activities. Also, the aim to bring 100 smart cities, a budget of Rs 7,060 cr was allocated, this will provide opportunity to developers to start set up projects in new locations where land is available at reasonable costs. A special incentive introduction to REITS will resolve issues of taxation, long term financing and liquidity for infra project. The opening routes for FDI will bring new investment opportunities, which is a welcome step in the real estate market. The proposed increase in personal income tax exemption from the present Rs 2 lakh to Rs 2.5 lakh and investment limit u/s 80c from Rs 1 lakh to Rs 1.5 lakh and the exemption for Housing Loan Interest from Rs 1.5 lakh to Rs 2 lakh will provide relief in tax liability to middle income group which will translate into demand in real estate properties. Further, the proposal to provide investment allowance to small scale industry will help setting up many many small scale units all of which improve the employment market and bring more money in markets. Overall it is a good budget for real estate sector although its demands to grant infrastructure status and Income Tax exemption under Sec. 80 IB to promote real estate, have not been directly addressed.

Brotin Banerjee, MD & CEO, Tata Housing

“Tata Housing Development Company (THDC) welcomes the announcement of the Union Budget 2014-15. Focusing on fiscal prudence, this budget has introduced proposals that may help to kick-start investments in the real estate sector. The government’s move to provide necessary incentives to REIT's and giving a tax pass-through status is a positive move as it will reduce the pressure on the banking system, avail fresh equity and attract long term finance from foreign as well as domestic sources. The Government’s endeavor of providing ‘housing for all by 2022’ through new measures announced in the Budget, such as allocation of funds for National Housing Bank, setting up a Mission on Low Cost Affordable Housing, inclusion of slum development in the list of CSR activities, would help in promoting development of affordable housing in the country. Extending additional tax incentives by increasing the interest deduction to Rs.2 lacs would help more people, especially the young working class population; to buy homes and this could trigger renewed interest in the real estate market. The reduction in built-up area threshold from 50,000 sq. m. to 20,000 sq. m. and capital requirement from US$ 10 million to US$ 5 million would help boost FDI in housing projects as more projects will now qualify. 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 7060 crore for 100 smart cities will create demand for housing in the long term. We are hopeful that the positive announcements in the budget will now find effective and quick implementation.”

Gaurav Gupta, General Secretary, Raj Nagar Extension Association & Director SG Estates

“The sector has been facing numerous challenges, such as lack of institutional funding, tax framework, lengthy approval processes and slow pace of infrastructural development. This year’s budget ensures that these issues are addressed and the focus of the government towards proposing some growth-oriented policies for India’s real estate sector is appreciable. Easing the tax norms for REIT, allocation of Rs 4,000 cr for Affordable Housing via National housing bank will bring optimism in the real estate sector which will result in surging positive effects on the economy. Besides, a number of initiatives like the additional tax exemption on housing loan interest for self-occupied homes raised to Rs 2 lakhs from the present rate of Rs 1.5 lakhs, is also commendable and this will make it an interesting proposition for buyers, investors and developers. Metro cities will get benefited with a decrease in built up area for FDI in Real Estate. The development of smart cities along with industrial corridors will further give the fillip and will have multiplier effect. The proposed policies will encourage activity in Real Estate industry and bring a wave of fast track development.”

David Walker, Executive Director SARE Homes

The new Government has provided a balanced, insightful budget which clearly lays out a road map for development. The commitment to a stable and investor friendly tax regime, resolving disputes and blocked projects and various measures to simplify rules and regulations will give great confidence to investors and providers of capital, which is essential for India to achieve high growth. For the real estate sector, the increase in interest tax deductibility on home loans and that increase in limits for the priority lending is welcomed as it reduces the cost of finance. The introductions of REITs is also welcomed as it eliminates duplication of taxation and will lower cost of finance. This will help developers attract long-term funds from foreign investor community.

P Sahel, Vice Chairman, Lotus Greens Developers Pvt Ltd

“The Union Budget 2014-15 is an encouraging one as it has created huge window for augmenting the condition of the real estate sector. The decision to provide a funding of Rs 4,000 crore for affordable housing will act as a mammoth morale booster for the real estate sector thereby reducing the gap of demand and supply which is prevalent in the market at the moment. Extending the tax incentive for housing loans from Rs 1.5 lakh to Rs 2 lakh will improve the interest of the first time home buyers. As part of the developer community we welcome the decision of making tax changes for introduction of REIT funding and easing the norms of FDI inflow will give a thrust to real estate market and overall sentiment will become positive. The amount of Rs 7060 cr for development of 100 smart cities will boost the sector furthermore as it will generate real development opportunities and employment in the sector. However, considering that this sector contributes more than 6 per cent share of the nation’s GDP, we were hoping for the affordable housing to be awarded infrastructure status, which would have further accelerated the growth”.

Neeraj Gulati, MD – Assotech Realty Pvt Ltd

“ The budget 2014-15 was a populous budget for the developer community, as representative from this sector I am grateful to our Finance Minister in charting out momentous measures to boost the stakeholders in real estate sector. The new tax exemption slab has been raised to Rs 2.5 lakh from the existing Rs 2 lakh. Besides, the government raised the tax exemption on home loans from Rs 1.5 lakh to Rs 2 lakh would motivate the home buyers to come forward and explore opportunity to buy their dream home. Again, the REIT pass through status would cater as a baited breath for developers at large who are facing funding crunch for a prolong period. The decision by the finance minister to allocate Rs 8,000 cr for improving rural housing out of which Rs 4,000 crore for development of housing units in the EWS category through National Housing Banking Program reflects the ambition of our new government “Housing for all”, a long awaited budget that has brings forth a set of aspiration for all the stakeholders in this sector.”

Aman Agarwal, Director – KV Developers

“We are extremely delighted after the budget speech by FM. Real estate has finally got its long pending attention in the Union Budget. We sincerely applaud the decisions made to boost this sector. The relaxation of norms under FDI and implementation of REITs are certainly going to provide a cheaper alternative to costlier loans by banks. We were expecting this from the Finance Minister. Allocation of Rs 8,000 crore for rural housing and Rs 4,000 crore for urban housing for poor and EWS are in line with government’s ambition of Housing for all by 2022. By allocating another fund of Rs 7,060 crore to develop smart cities also shows government’s commitment for a collective growth. Government has also emphasised on involvement of private corporate in the development measures. This is indeed a welcome move and will allow private companies play a measure role in government’s mission 2022. We, however, were expecting to get an infrastructure status in the budget. This would have allowed the sector reap some more benefits in terms of funding. This remain unfulfilled. Overall, this is a welcome budget by the Union Government and certainly promises Acchhe Din ahead.”

Pradeep Jain, Chairman – Parsvnath Developers

“We hail the maiden budget of Finance Minister. It clearly suggests the development flank taken by the NDA govt. Real Estate sector for long time was ignored with no significant proposals made to spur growth in this sector. For the first time after the slowdown the Union Budget 2014 gives a boost to the real estate sector. We thank Hon’ble Minister for paying attention through legislations like REIT, promoting affordable housing and allocating over USD 50,000 crores towards urban infrastructure. Government’s emphasis on PPP shows its commitment towards a collective growth. Allocation of Rs 7,060 crore to develop 100 smart cities is certainly going to promote the sector on global front. Funding had always been a concern for us as developers. Foreign investors were also shying away due to ambiguity in rules. With implementation of REITs and relaxation in FDI norms, the problem of fund crunch will get mitigated. Cutting down the total built-up area requirement to 20,000 mn sq ft, minimum lock up period to 3 years and a minimum investment of $5 million is indeed a welcome move. Government has also shown its willingness to boost rural housing scheme and low cost housing for urban poor and EWS, with an allocation of Rs 8,000 crore and Rs 4,000 crore respectively. Introducing the tax Rebate under 80C, an increase by Rs. 50,000 to Rs.1.5 lakhs and housing interest deduction limit extension from Rs. 1.5 lakh to Rs. 2 lakhs will help empower the middle class by giving them more purchasing power. Though we have moved ahead in the right direction, a lot more has to be done, primarily awarding an infrastructure status to the real estate sector”

Nikhil Jain, CEO, Ramprastha Group

“The Union budget 2014-15 has set many important elements to improve the condition of the real estate sector. As part of the real estate community, we applaud the decision of necessary tax changes to introduce real estate investment trusts and easing the norms for FDI inflow in the affordable housing segment will definitely give a huge boost to the sector. Going further the allocation of Rs 4,000 crore towards affordable housing will help in widening the interests of the developers towards this segment thereby matching the demand supply gap. Although the expectation was higher, the move of extending tax incentive for housing loans from Rs 1.5 lakhs to Rs 2 lakhs will enhance the interest of the buyers to the market. Apart from this, the decision to spend Rs. 7,060 crore for development of 100 smart cities will augment the sector further by creating real estate development opportunities in those cities and will also generate employment in the sector.”

Bijay Agarwal, MD, Salarpuria Sattva.

Overall a good budget with carefully considered initiatives that will help trigger growth in the Real Estate sector. Growth in this sector will generate employment and indirectly boost other sectors like cement, steel and related industries connected to housing and construction. Overall this budget will give a positive impetus to the economy.

Manish Agarwal, Managing Director, Satya Group & Secretary, CREDAI NCR

"A cursory glance on the budget 2014-15 makes it amply clear that the Government looks determined to bring economy and the real estate sector back on the track. Smart cities, allocation to urban and rural housing, boost to post infrastructure and connectivity, tweaking of FDI for real estate sector and tax rebate to REITs will provide much needed boost to the real estate sector in general and country's economy in particular. Some supplementary measures like interest exemption from housing loan, increase in saving limit, creation of infrastructure investment trust, support to encourage manufacturing industry, encouragement to tourism and sport facilities too will have positive impact. Overall, its a futuristic budget which looks like first of five installments to push growth, create jobs and re-establish our country as investment destination."

Ajay Aggarwal, Managing Director, Microtek Infrastructures Pvt. Ltd

"At first glance the budget looks like a fairly decent beginning for the new government. FM's emphasis on "housing for all" was explicitly visible in the budget speech. Allocation for urban and rural housing, Rs 4,000 crore for low cost housing, along with Rs 7,060 crore for smart cities reflect futuristic thinking of government's leadership which would benefit the real estate sector in long run. Supplementing them, tax rebates to REITs, metro trains in each city with more than 20 Lakh population, AIIMS in each state and scheme for development of new airports in smaller cities are just the right ingredients to take the real estate sector to next level."

Rahul Sabharwal, CEO, VBHC

Directionally the budget seems to be extremely positive, the proposal of allocation of Rs. 40 billion for affordable housing along with liberalized FDI policy for the smart cities will give the much needed boost to the sector. While in the initial stages but the tax incentive on REITS will have a long term impact on monetizing the assets of the real estate companies.