Budget 2015: Realty Stalwarts Give Mixed Reactions

The much-awaited Union Budget for the financial year 2015-16 is out. Here is what the industry experts have to say.

Manoj Gaur, MD, Gaursons India Ltd & President CREDAI Western UP

 “A very controlled budget which appeared to be cautious step by the government to not make big announcements. As of now real estate sector will not benefit at all from it and the demands of the sector are still unmet. What we fear is the probable increase in raw material cost which would not be good for the costing of housing. General people are already reeling under the high cost of homes, which are not in any way control of real estate developers, and this budget is a disappointment for people who were expecting rationalisation in prices of homes.”

Harpreet Singh, Partner- Risk Advisory Services, PwC India

“The Finance Ministers announcement of 6 Cr housing units by 2020, while encouraging, needs to be backed up by strong policy directives in the area. Successive budgets have acknowledged the need for increased focus in the housing sector; however, there has been very little done on ground in this direction by earlier governments. We will have to wait to understand the implementation strategy that should back such an announcement.”

Aman Nagar, Director, Paras Buildtech

“It is essentially a balanced budget with more of long term undertone. The budget has sought to build a strong foundation for the growth of housing sector across the length and breadth of country. We are going to see a lot of action in rural areas and semi-urban areas post-budget which is good for the country. It has also addressed the worrying scenario of drop in savings and both direct and indirect measures will help in augmenting individual savings which is a good news for the housing sector. From the corporate point of view, the government has taken a courageous step by trimming corporate tax structure, doing away with surcharge on rich and has introduced measures to facilitate easy investment. Overall, a balanced budget which has established a fine balanced between social and corporate sector.”

Anuj Goel, Executive Director, KDP Infrastructure

“This budget scores both on short term respite as well as long term vision. On the one hand, it has created space through exemptions for more individual savings, on the other hand measures like a roof for each family by 2022, push for rural development, universal pension and security system will create secure and strong society. By reducing rate of corporate tax and introducing investor friendly steps, the government has certainly laid out strong foundation for double digit growth rate. For the housing sector, this budget has a lot of both direct and indirect provisions which will have positive impact and bring it back in green zone.”

David Walker, Managing Direction of SARE Homes

“We are also enthused by the reduction of the corporate tax and MAT as it will help operations of corporations. The Government’s move to rationalise the capital gains regime for REITs and InvITs however will be beneficial for the commercial realty space. Budget once more falls short of meeting the expectations of the real estate sector, mainly the residential housing segment. The sector will have to continue to wait for its foremost demand for a separate infrastructure status and other measures which would have rejuvenated the weakened demand which had adversely hit the sector.”

 R.K Arora, Chairman, Supertech Ltd

“Although the Finance Minister in his Budget Speech has announced construction of 2 crore houses in rural India and 4 crore houses in urban areas, no concession either for home buyers or for the developers has been given in the Budget.  The Budget disappointed the Real Estate sector  with proposal to increase  Service Tax from 12% to 14% .    The proposed increases in service tax along with   increase in Excise Duty, are bound to result in inflation and overall recession in real estate and other segments.  The proposal to reduce Corporate Tax from 30% to 25% is a welcome step for big corporates.  In direct tax segment, the only relief to
taxpayer is increase in exemption of transportation from Rs. 800/- to Rs. 1600/-.  No other proposal to boost buying power of taxpayer is visible in the Budget.  The relaxation in REITS rules would, however, help attracting investment in Real Estate.”

Mohit Goel, CEO, Omaxe Ltd.

 “The Budget 2015 has put a lot of emphasis on social security, infrastructure and skill development. However, the real estate sector continues to be deprived of any real measures to boost the sector and kick-start housing demand. No benefits on personal income tax front were given to encourage savings. However, the government has found other ways to spur savings, which might not necessarily result in any captive investment. The increase in service tax is another negative for real estate. The decrease in corporate tax may not result in investment. The Government’s vision on Housing for all by 2022 and Smart Cities needs more concrete direction.  I believe that the measures announced today in the Budget will see a far reaching impact in the years ahead, but not immediately.”

Anubhav Jain, Director, Group Silverglades

“Even though Budget 2015 is pro-growth and pro-investments, there is lack of clear direction when it comes to the realty sector. We were hoping for concrete steps to increase the sluggish housing demand and revive the sector. The govt has announced its plan for 6 crore homes but has failed to lay down steps for the same. Increase in service tax and no change in interest on housing loans is a negative. Delay in GST implementation to next year is also a dampener.”