BHUBANESHWAR/NEW DELHI: With the government set to announce the interim budget next week ahead of the upcoming Lok Sabha polls this summer, the housing ministry has sought an almost Rs 10,000 crore increase in total budgetary allocation for the next fiscal year to fund affordable housing and smart city schemes.
While the demand for a general increase in allocation is already under consideration, sources add that the government is also mulling budgeting larger outlays for the Prime Minister’s Housing for All (PM Awas Yojna) scheme by 50 per cent.
“The sector has asked for a hike in the budget to Rs 50,000 crore. The ministry has also sought to increase budgetary outlay for the Prime Minister’s Housing for All (affordable housing) scheme by 50 per cent,” an official from the finance ministry told this publication. “The allocation is likely to go up to Rs 15,000 crore from Rs 10,000 crore in 2018-19. Also, some incentives for rural housing could be announced,” the official added.
The real estate sector, however, is not hoping for a major boost from the interim budget. “In such budgets, the incumbent government usually tries to make a strong electoral pitch by offering tax sops or promises of welfare schemes. But this year, we must temper our optimism with realism and not expect major boosts for the real estate sector in the Budget,” pointed out Anuj Puri, Chairman – ANAROCK Property Consultants.
Despite muted expectations, finding a place in the sector’s wish list is the hope that the government will incentivise rental housing and increase the limit of interest deductions, paid on home loans, from Rs 2 lakh to Rs 3 lakh.
Meanwhile, the National Real Estate Development Council has suggested that income arising from the renting of residential properties be taxed at a flat rate of 10 per cent. It has also suggested that stamp duty be brought under the purview of the Goods and Services Tax.
“Pragmatic steps should be implemented which can further increase the investment and purchasing power of the masses, give a further boost to affordable housing and result in the desired massive growth and development of infrastructure,” Parveen Jain, CMD, Tulip Infratech, said.