The need of the hour for Indian real estate is to regenerate demand in the residential sector
India's housing market has been witness to an avalanche of reforms over the past 19-odd months. Rolled out to set a new order in the beleaguered industry, the path breaking regulations crippled momentum in an already sluggish market.
The need of the hour for Indian real estate is to regenerate demand in the residential sector. While we appreciate the union government's efforts in infusing transparency and consolidation with regulatory steps such as Real Estate Regulatory Authority (RERA) and Goods and Services Tax (GST), there was a burning need to stimulate demand in housing. The budget however, has offered little cheer for the real estate sector.
The budget has predominantly focussed on revitalising the rural economy which is a good move. From a sector-wise point of view it has been largely beneficial to healthcare, agriculture and infrastructure. Holistically speaking that augurs well for the nation but this Union Budget has failed to uplift the spirit of the beleaguered real estate sector.
In 2017, measures surrounding 'Affordable Housing' were the mainstay for the real estate industry. This was also evident in the Credit Linked Subsidy Scheme (CLSS) and the last Goods & Services Tax (GST) Council meet where they brought down the effective rate of GST from 12% to 8%.
A similar trend is visible in this budget where the 'Affordable Housing' fund under National Housing Bank (NHB) has been created as a part of the priority sector lending.
However, the budget has been silent on stimulating mainstream real estate demand. The sector grappling with the reforms-driven new order has been bereft of any meaningful intervention that could have been achieved through the budget.
(The author is Director-Ahmedabad, Knight Frank India)
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