Industry status for realty positive for sector: ABW Infra

By: Mr. Aditya Bansal

The Budget 2010 is extremely encouraging to the Real Estate Sector. Government has taken special measures to uplift this sector which has been reeling in the after math of the downturn.

Allocation of funding to the amount of Rs 1.74 trillion for infrastructure development and Rs 19894 crore allotted for road infrastructure projects will allow much greater opportunity for Real Estate development in the coming year. Furthermore the increase in investments through Indira Awaas Yogana and Bharat Nirman Yojana will boost housing and commercial investment by enhanced infrastructural development. 
 
In addition to this, the broadening of the tax slabs will benefit majority of the individual tax payers and therefore lead to larger availability of disposable incomes. This in turn will intensify demand for affordable housing which has constantly been on the rise and its buyers will stand to gain with this move. Although interest subvention on loans upto 20 lacs is definitely welcome but we feel that the bracket of rebate amount should have extended from current Rs 10 lacs to Rs 20 lacs since all the housing in this range falls in the affordable housing segment. Additionally, the principal exemption on housing loans which was expected to be increased to Rs 1.5 lacs from its current Rs 1 lac deduction has not materialized.

Besides, if the Real Estate sector had been granted an Industry stature by now, the financing through banks would have been easier in this highly capital driven sector. Also opportunities for external borrowing would have magnified.