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Union Budget
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General Budget 2014: How the real estate industry of Gurgaon is reacting to it!
The real estate market in Gurgaon had been going through a lull phase for more than a year now. The negativity in the market has spread to an extent where prices have started seeing a steady decline in what was once termed as India's most attractive realty market. From retrospective Tax (VAT in builder constructed flats) to hefty service tax - the industry was looking at policies that would lessen the burden from end users, but very little came on their way. How are various real estate companies reacting to the budget?

Mr. Pradeep Jain, Chairman - Parsvnath Developers

Poll
Are you happy with Indian Union Budget 2014?
Yes :
60.48 %
No :
33.87 %
Can't say :
5.65 %
Sponsored By :
Pradeep Jain''We hail the maiden budget speech by Hon Finance Minister, Mr. Arun Jaitly, this clearly suggest that development flank taken by the NDA govt. Real Estate sector for long time was ignored with no significant proposals made to spur growth in this sector. For the first time after the slowdown the Union Budget 2014 gives a boost to the real estate sector. We thank Hon'ble Minister for paying attention through legislations like REIT, promoting affordable housing and allocating over USD 50,000 crores towards urban infrastructure.

Government's emphasis on PPP shows its commitment towards a collective growth. Allocation of Rs 7,060 crore to develop 100 smart cities is certainly going to promote the sector on global front. Funding had always been a concern for us as developers. Foreign investors were also shying away due to ambiguity in rules. With implementation of REITs and relaxation in FDI norms, the problem of fund crunch will get mitigated. Cutting down the total built-up area requirement to 20,000 mn sq ft, minimum lock up period to 3 years and a minimum investment of $5 million is indeed a welcome move. Government has also shown its willingness to boost rural housing scheme and low cost housing for urban poor and EWS, with an allocation of Rs 8000 crore and Rs 4000 crore respectively. Introducing the tax Rebate under 80C, an increase by Rs. 50,000 to Rs.1.5 lakhs and housing interest deduction limit extension from Rs. 1.5 lakh to Rs. 2 lakhs will help empower the middle class by giving them more purchasing power.

Though we have moved ahead in the right direction, a lot more has to be done, primarily awarding an infrastructure status to the real estate sector"

Mr. Aman Agarwal, Director - KV Developers

Aman Aggarwal''We are extremely delighted after today budget speech by Shri Arun Jaitley. Real estate has finally got its long pending attention in the Union Budget. We sincerely applaud the decisions made to boost this sector. The relaxation of norms under FDI and implementation of REITs are certainly going to provide a cheaper alternative to costlier loans by banks. We were expecting this from the Finance Minister. Allocation of Rs 8000 crore for rural housing and Rs 4000 crore for urban housing for poor and EWS are in line with government's ambition of Housing for all by 2022.

By allocating another fund of Rs 7,060 crore to develop smart cities also shows government's commitment for a collective growth. Government has also emphasized on involvement of private corporate in the development measures. This is indeed a welcome move and will allow private companies play a measure role in government's mission 2022.

We, however, were expecting to get an infrastructure status in the budget. This would have allowed the sector reap some more benefits in terms of funding. This remain unfulfilled. Overall, this is a welcome budget by the Union Government and certainly promises Acchhe Din ahead.''

Mr. David Walker, Executive Director of SARE Homes

David Walker''The new Government has provided a balanced, insightful budget which clearly lays out a road map for development. The commitment to a stable and investor friendly tax regime, resolving disputes and blocked projects and various measures to simplify rules and regulations will give great confidence to investors and providers of capital, which is essential for India to achieve high growth. For the real estate sector, the increase in interest tax deductibility on home loans and that increase in limits for the priority lending is welcomed as it reduces the cost of finance. The introductions of REITs is also welcomed as it eliminates duplication of taxation and so will lower cost of finance. This will help developers attract long-term funds from foreign investor community.''

Ravi Saund, COO, CHD Developers Ltd

Ravi Saund''The new government's maiden budget claims to contain reform measures to revitalize growth and drive engines of the economy burgeoning again. Will this growth oriented budget withstand the test of time? There's no denying it's a common budget, yet it's difficult to prophesize at this moment. However, couple of reforms announced is a welcome move. It is positive for the housing sector, though the focus is clearly on affordable segment.

The government has encouraged the home buyers by widening Housing loan interest exemption U/s 24 B from Rs 1.5 lakh to Rs 2 lakh coupled by personal tax exemption slab raised to the level of 2.5 lakhs per annum. The latter will definitely boost investor's sentiments in the real estate sector.

Real Estate Investment Trusts(REITs), Infrastructure Investment trusts and granting pass through status for taxation is a welcome and essential step for successful implementation of REIT's in India. It will help in easing liquidity requirement for developers, paving way to raise easy capital and also provide access to retail investors to benefits from regular income and appreciation benefits from real estate. This is bound to give the much needed fillip to the sector.

The government is focused on the vision of developing and modernizing with the introduction of smart cities. To make this dream a reality, the finance minister announced allocation of Rs 7,060 crores in the current fiscal for development of the smart cities and 7 new industrial cities. This will drive real estate development in these pockets and create newer markets.

Infrastructure has received a major thrust. The steps to increase funding for roads, highways, airports, power and SEZs will surely add more terrain on the Indian realty map taking tier 2 and tier 3 cities on new growth trajectory.
 

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