As the Hon’ble Finance Minister announced the budget proposals, there were some ‘firsts’ to begin with, the budget itself was digital. The never before budget largely outlined six pillars of proposals to strengthen the vision of Atmanirbhar Bharat in healthcare & wellbeing, capital, infrastructure inclusive development, reinvigorating human capital, innovation and R&D, minimum government and maximum governance.
The growth-oriented incremental budget has laid out a roadmap for India’s economy to move back to normalcy post the Covid-19 pandemic crisis. The fine balancing act of enhanced capital expenditure outlay without imposing an additional taxation is great relief, a measuredly surely laudable by India Inc. The innovative measures are in sync to catapult India to achieve its target of a $5 trillion economy.
The bullish response from the equity market is indicative of its positive impact on India Inc. fostering the roadmap to augment Atmanirbhar Bharat vision. Also, the reaction of the individual taxpayer, whose concerns about higher direct taxes was also allayed. On the positive aspect, the aggressive investment in infrastructure allocated in the Budget will not just reinvigorate employment and investment, but also fulfil the need for sustainable economic revival.
In turn, this stimulation will power off take and growth in real estate. Special impetus to affordable housing by extending the deadline for additional Rs 1.5 lakh as tax deduction given on loans taken to buy a house in an affordable housing project till March 31, 2022. Affordable housing projects also got an extension for tax benefits, for projects completed till March 31, 2022.
Similarly, tax exemption for notified affordable housing for migrant workers and the deduction on payment of interest for affordable housing have been extended by a year. These aspects need to be seen in reference to the aspect of affordable housing having been a fast growing segment for real estate. Budget also proposed incentivising rental housing for migrant labourers and to promote affordable rental under Section 80-IBA of the Income-Tax Act and this scheme will be notified in due course.
Apart from the measures mentioned in the budget, affordable housing in Maharashtra will be the gainer — not just because the Budget has positives, but also because it attracts only 1 per cent GST and Rs 1,000 as stamp duty. From an industry perspective, setting up a long term development financial fund is a good move, as it will create additional lending options and address the liquidity constraint which impacts real estate.
The renewed focus on privatisation and recapitalisation of banks is important, again from the same perspective of liquidity constraint. The one section where the budget lacks is demand incentives, which needed support. Time-bound and proper implementation of the various measures tops the wish list of many Indians.
Niranjan Hiranandani
National President, NAREDCO