Kishor Pate, CMD – Amit Enterprises Housing Ltd.:
Given that overall consumption sentiment is key, the new government will primarily need to present a budget that increases Indians’ financial confidence. To achieve this, it will have to introduce a more benevolent taxation regime. Specific to boosting the real estate sector, the government must formulate and present a policy which provides clear and attractive tax benefits to developers who are focused on affordable housing.
The Budget should also make the rate of interest specific to home loans more reasonable, as the interest rates currently being offered by banks are still too high. Paying so much interest has serious implications on the family budgets of most middle-class wage earners. It is not surprising that many of them currently shy away from home loans. The budget should bring the interest rate on home loans down to between 7.5%-8.0%.
Anil Pharande, CMD – Pharande Spaces:
From the real estate sector’s perspective, there are many aspects that the Union Budget should address this year. One of the foremost is further reducing the bureaucratic red tape involved in project development. Expedited clearances for a larger segment of residential projects will be a key for reducing project delays. An announcement that streamlines the process of obtaining clearances will go a very long way in boosting the real estate industry.
We also expect the budget to make announcements regarding the regulation of construction material costs, and to make generous allocations for the development of infrastructure to support the growth of new areas where cost-effective real estate can meet the express need for affordable housing.
Arvind Jain, Managing Director – Pride Group:
The Union budget should bring a significant decrease in interest rates on home loans. The Ministry for Urban Development and Housing had previously underscored its commitment to this cause, and the upcoming Budget will hopefully bring firm evidence of this focus. Developers, home buyers and banks are all keenly awaiting such an announcement, which would bring with it a significant revival in sentiment.
Also, the budget needs to do something to bring down the cost of borrowing for developers, because raising capital for development of new projects remains a huge challenge. Lending rates for real estate development are excessive, and raising funds through other sources is even more expensive. The interest rates on lending to real estate developers should be brought down so as to help rationalize the cost of construction. This would also help in bringing down property prices.