Real Estate Sector: Pune Builders Reactions On Union Budget 2023
Pune, 1st February 2023:
Satish Magar, Chairman, CREDAI National – With the announcement of the lowering of the income tax rates and increasing income tax limits, there will be more disposable income in the hands of the middle class. The expectation of the middle class is to buy a home, which post COVID has become more relevant so that will give a good boost to the Real Estate industry as far as the middle class sector is concerned. For capital gains cap of Rs. 10 Crores, we need to see the fine print but it may be a deterrent to all the bigger cities. However, we did not see anything of the other demands we had asked for but we are happy with this indirect benefit.
Rohit Gera, Managing Director, Gera Developments: “The government has continued the approach of taking a long-term view of the economy. The fiscal deficit being maintained as per the budget estimates and the downward trend thereof is reassuring. The rationalization in tax slabs under the new tax regime is welcome. Leaving the old tax slabs untouched clearly reinforces the governments statement of making the new tax structure the default structure. Steps being taken to increase digitalization as well as ease of doing business are also very welcome. The PMAY scheme has been instrumental in making homes available and affordable for the masses. The increase in allocation of a massive 66% will go a long way towards realizing the dream of their own home for many Indian families”
Ranjit Naiknavare, Vice President, CREDAI- Pune Metro – Though no direct measures or concessions were given to the Real Estate sector, it will indirectly benefit the common man in terms of home-buying. We were hoping for the subsidy on the rental housing scheme but it did not come. We were also hoping that interest payout exemption would be increased for individuals who take loans but instead of that the government has given more money in the hands of the middle class, which ultimately will increase their eligibility for loans and that’s very important. With that, we expect that the EMI of Rs. 7000-10000 rupees may increase every year. We had also asked for an increase to the existing limit of Rs 2 Lakh on exemption of interest paid on home loan but it was not considered.
Also the Urban Planning reforms to develop urban cities are welcomed as Rs. 10,000 CR sanctioned for infra development will be an incentive based funds for the Tier 2- and Tier 3 cities. The additional Rs. 90 Thousand Crore for youth skilling enhancement and for the MSME sector will have its benefits. Salaried class will benefit with income tax rebates and there will be money in the hands of the middle class. However, the budget for ‘aam admi’ was 8 out of 10 but for real estate it was 5 out of 10.
Arvind Jain, Secretary, CREDAI- Pune Metro – Though there had been no consideration for the demands made by CREDAI-Pune Metro, there were several indirect benefits for the real estate industry from the budget. CREDAI- Pune Metro had some recommendations, which were not included in the budget. Also an unsold inventory lying with the developers, which is taxed as deemed income is not fair in terms of real estate because if the inventory is not sold then it cannot fall under the bracket of estimated income. We were expecting some change in that but it was not considered. The capital gain cap of Rs. 10 crore needs to be read in detail.
Rahul Talele, Group CEO – Kolte-Patil Developers Limited: Overall, a strong budget, reflective of government’s confidence in the economy and, aimed at fostering a compounded growth effect. We are extremely pleased with government’s consistent focus on sustainable cities, strategic urban planning, and transit-oriented developments via Urban Infrastructure Development Fund enabling the growth of Tier II, and Tier III cities. Increasing the fund for PMAY by 66% to Rs. 79,000 cr. will provide further impetus to affordable housing. In addition, increasing the limit for personal income tax rebate to Rs 7 lakhs will have a direct effect on disposable income, encouraging purchase of residential real estate. It is heartening to see India’s emphasis on 5G based applications hinting towards India’s stronger stance on digitization. Make AI in India and Make AI work for India initiatives will drive the future of India’s digital development that will go beyond sectors, creating multiple new-age job opportunities in the process. In all, we welcome government’s high capex outlay and thrust on green growth to build a more sustainable future.
Krushna Kumar Goyal, Chairman and Managing Director, Kohinoor Group : Finance Minister Niramala Sitharaman has presented the Union Budget with focus on basis infrastructure, farming, rural development, youth, small and medium entrepreneurs. There is no specific provision for housing/real estate sector. However, the funds for the ‘Pradhanmantri Awas Yojana’ have been raised by 66 percent to Rs 79,000 crore. I believe that it will provide homes for common man will be in their budget. Secondly I will say that the Finance Minister’s announcement of making income till Rs 7 lakh tax free is indeed a big one. This and other exemptions in the Income Tax will enable citizens to have adequate funds for investments. Thus, this provision can be seen as a one which encourages one to buy a house.
Anil Pharande, President, CREDAI- Pune Metro – The budget is not directly aimed at the Real Estate sector, however the eligibility of taking home loans has increased due to recently announced tax benefits. With that we hope that the Real Estate sector will further grow.
Abhishek Bhatewara, Executive Director, Rohan Builders – This is a Budget focusing on inclusive growth, fiscal discipline & making India future-ready. The booster dose to the Infrastructure sector will act as a strong economic multiplier boosting the real estate sector too, especially Tier 2 & 3 cities. The focus on creating job opportunities, skill development of youth, agricultural productivity improvement & the direct tax benefits announced will put more income in the hands of people. This will have a positive impact on the affordable housing sector. Governments initiatives towards furthering Ease of Doing Business, and its commitment to the fiscal deficit target of 4.5% by FY 25-26 will give a boost to investment in the real estate sector from both domestic & foreign investors. Overall a balanced, financially prudent & visionary budget.
Vishal Gokhale, Chairman and Managing Director, Gokhale Constructions – The real estate sector is slowly recovering from the impact of pandemic and was expecting certain steps to boost housing. Though there is no special announcement for real estate. However, the budget looks promising for economic growth and thus is likely to help the real estate sector indirectly.
Kapil Gandhi, MD, Sigma One Universal – The budget is focused on empowering the youth, women, startups and putting more money in the hands of the common man. Personally, I think this budget is very good because the real estate sector is sentiment driven. The concessions given in the budget to the low and middle income group will help create a positive sentiment among them, as the financial benefits to them will be greater. Hence they will be encouraged to invest in the home buying and construction sector alone. At the same time, the provisions announced for infrastructure development and air connectivity will encourage the development of Tier 3 and Tier 4 cities, which will be better connected to Tier 1 cities. This will give priority to investment in the construction sector in those cities as well. Therefore, I expect that the real estate sector will definitely benefit from this budget.
CA Vinit Deo, Financial Expert and Chairman Posiview Group – The change in slab rates for taxation will put more money in the hands of buyers and they will get an incentive to buy a house. The budget has a feel good factor catering to all round development of the country including construction of airports, construction of infrastructure etc. will create a feel good factor for investment and spending in the country in the coming year.
