Budget expectations: Realty sector seeks industry status, higher tax relief for home buyers

Industry experts believe that to boost the real estate industry, the government should consider giving it industry status, and provide single window clearance, tax breaks, and GST rationalization in the budget

Industry status for the housing sector and single-window clearance for housing projects are standard asks and remain in place this year, as well.

Housing & Urban Development Corporation Ltd, which builds houses for government projects, bucked the trend, rising 19.62%. NBCC also surged 9.78%.

Experts are calling for an increase in the price cap for affordable housing in metro cities, from ₹45 lakh to ₹1 crore, to make homes more accessible.

Finance Minister Nirmala Sitharaman chaired a meeting in Delhi to review Public Sector Banks' performance. Discussions included areas like Deposit Mobilisation, Digital Payments, Cyber Security, and Access to Credit under Financial Inclusion. Sitharaman urged banks to focus on efficient customer service, rural outreach, and increasing credit flow for initiatives like PM Surya Ghar Muft Bijli Yojana. Collaboration against fraud and cyber risks was also emphasized, along with implementing new credit assessment models for MSMEs.

One sector which did not recover from the shock of the global financial crisis for more than a decade was the real estate sector. Excess inventory, over leveraged balance sheets and weak demand were some of the factors which plagued the sector. Although the process has been slow, it took almost a decade but there has been a clean up in the sector. Regulatory changes like bringing in RERA and banks getting aggressive in recovering dues from builders and also judicial intervention had an impact on the working of the industry.

Union budget 2024: The government is expected to continue prioritizing capital expenditure, particularly in the infrastructure sector, in the upcoming Budget to drive economic growth. The government has allocated a record high of Rs 10 lakh crore for capex during the current financial year, with a consistent increase. The upcoming Budget is expected to allocate a substantial amount for capital expenditure, as it has a multiplier effect on the economy and attracts private investment.

On February 1, finance minister Nirmala Sitharaman will present an ‘interim’ budget as the government faces a general election this year, in April-May.

Interim budget: India's budget plays a big role in strengthening the property market and supporting the Bharat Moment. The budget should focus on affordable housing and streamline clearance processes to promote growth in the residential real estate sector. It is crucial to grant industry status to the real estate sector and facilitate easier credit access. Increasing the tax rebate on home loan interest rates from Rs 2 lakh to Rs 5 lakh and providing incentives for developers and homebuyers will stimulate the affordable housing market. These measures will contribute to achieving 'housing for all' and invigorate the housing sector.

CREDAI has urged the government to increase tax exemption limit on principal amount as well as interest paid on home loans to boost housing demand