Union Budget 2023 and the opportunities it presents for real estate

As the Indian real estate market emerges from the shadow of a global epidemic, it has high expectations for Budget 2023. Despite the fact that demand for real estate in India has increased in recent months, the real estate and construction industries are hoping for some specific relief. Even though the Coronavirus pandemic reduced site visits and home demand across the country, the months that followed inspired confidence with a resurgence in housing demand. The demand for residential housing in India's top eight cities increased by more than 15% year on year. Similarly, a significant rebound is expected in 2023. The real estate industry expects the government to take specific steps to smooth the road to recovery at a time when it is dealing with post-Corona issues such as rising input costs and razor-thin margins.
 

Here is what industry professionals have to say about the industry expectations from the budget.
 

Gurmit Singh Arora, National President, Indian Plumbing Association 
"Stamp duty needs to be reduced. Following the implementation of GST, the industry was burdened, and it is extremely difficult for builders to pass it on to consumers. This can be accomplished by granting waivers rather than incentivizing it. In order to reduce the nation's carbon footprint, the government should incentivize green building. The government should also encourage and recruit more entrepreneurs."
 
Nakul Mathur, MD, Avanta India
"Indian real estate stands on a strong footing with a hike of 50% in sales transactions in 2022, compared to the previous calendar year. The positive sentiments will continue in 2023 backed by a healthy economic outlook, expansion in the job market, and a rise in per capita income. Meanwhile, it is also imperative for the governing agencies to take proactive steps to further build consumer demands alongside streamlining the supply cycle. Steps such as reducing GST rates on raw materials such as cement & steel, offering better credit for developers, and single window clearance can immensely help the overall sector."
 

Siddharth Maurya, Resource Specialist, Expertise Real-Estate and Fund Management 
“The government must acknowledge the important role played by the sector and make deep policy reforms to accelerate growth in realty demand. Currently, concession can be availed in income tax on up to 2 lakhs paid as interest on home loans. This should be revised and increased to build healthy demand in the sector. Likewise, waivers or reductions should be offered on GSTs on raw materials such as cement, steel, etc. Raw material prices are increasing and reduction in GST rates can give a lot of relief to the developer fraternity. Giving infrastructure status to the sector is also long due as it can help in building liquidity in the sector.” 
 

Ankit Goel, Director, Goel Ganga Developments
“In this budget, the government should mull impetus such as an increase in home loan interest deduction. Under section 24 of the Income Tax, one can avail of a deduction of up to INR 2 Lacs of home loan interest on the income tax. If the government can increase the limit to INR 5 Lacs, it can be a great help for both buyers as well as developers, as due to other succeeding/ successful factors, the prices and EMIs of homes have gone up, so it is a must to increase the deduction for the same”.
 

Suren Goyal, Partner, RPS Group 
“Indian real estate constitutes close to 8% of the Indian economy. It is also the second-largest job creator after the agriculture sector and close to 250 ancillary industries are dependent on it. This further reflects the importance of the sector and it is essential that GOI take concentrated efforts to help the industry. Overall the industry looks upbeat but the rise in interest rates can decelerate the growth juggernaut. Hence the government should step up and take proactive steps to reduce lending rates. If directly reducing the rates is not feasible then it should at least try other means such as offering incentives to first-time home buyers and rendering more lucrative deductions in income tax returns."
 

Ankit Aggarwal, MD, Devika Group 
“The real estate industry is considering a few tax breaks, such as a 2 lakh reimbursement increase under Section 24, because gross margins are already low in the immediate wake of the global epidemic, and developers must compensate for lost time. For many years, there has been a demand for a single window clearance framework. Furthermore, now would be an ideal time to confer industry status on the sector of real estate in order for it to obtain lower-cost credit from financial institutions."