Budget reaction from Mr.M.R Jaishankar, CMD, Brigade Group
Overall the budget proposals are below my expectations. I would rate it 7 on 10.
While it is not a bad budget, it is not a great budget either. Much more could have been done to give a fillip to the industry since substantial effort is made to improve the rural sector.
The proposal to boost Affordable Housing is encouraging. It benefits both the end customer and the Developer. For the Developer, there will be a saving of 13% to 14% on tax on income considering MAT is applicable.
For Individual first home buyers, an additional tax break of Rs. 50,000 acts as a further incentive.
Exemption of Dividend Distribution Tax on REITs was awaited and is welcome. Similarly, the extension of the Sunset clause for SEZs to 31st March 2020 is also welcome.
Exemption of Excise Duty on RMC for affordable housing.
Other welcome measure is to bring back black money to the mainstream by introducing a Compliance Window.
Initiatives in doing ease of business particularly in Tax Administration.
Budget reaction from Mr.Om Ahuja, CEO, Residential, Brigade Group
“Overall a good budget when it comes to balancing multiple challenges economy is facing and maintaining fiscal discipline. Retaining fiscal deficit in 2015-16 & 2016-17 at 3.9% & 3.5% without compromising growth oriented initiatives like growth of rural economy, agriculture and farmers welfare, infrastructure development & boost to employment and growth is highly commendable. With multiple new taxes, cess, taxing dividends in hands of investors over Rs.10 Lacs on the one side and undeclared income disclosure scheme & multiple reforms in tax dispute resolution framework on the other side reflects the Government intent to bring better environment for “ease of doing business” & attract FDI for “Make in India” initiative. For Real Estate Industry, few key initiatives are a welcome step. Overall the budget for the Real Estate industry is positive with three key initiatives:
Common man – Smaller benefit for common man, deduction for additional interest of Rs. 50,000 per annum for loans up to Rs. 35 lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed Rs.50 lakh.
Affordable Housing – (1) Service Tax Exemption on construction of affordable houses up to 60 square metres under any scheme of the Central or State Government including PPP Schemes, (2) 100% deduction for profits to an undertaking in housing project for flats upto 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019 and completed in three years (3) Extending the excise duty exemption, presently available to Concrete Mix manufactured at site for use in construction work to Ready Mix Concrete will help the industry by reducing the input cost.
REIT’s now a possibility – Exemption of Dividend Distribution Tax for distribution of dividends by SPVs to REIT & INVITs will now make REITs a possibility in India. This will help the industry in creating newer avenues for raising capital and capitalizing the income yielding assets. Investors in India will now have a new attractive asset class to build long term wealth with regular income.
Few industry expectations like increasing tax deductions for common man for housing loan interest and easing liquidity for the industry were missing but few initiatives rolled out making affordable housing industry growth will now see mission “Housing for All ” a possibility in India.”
Budget reaction from Mr.Vishal Mirchandani, CEO, Retails and Commecrial, Brigade Enterprises
– This budget clearly outlines the Social Economic development agenda of the Central Government with relative fiscal discipline which is good.
– Good infrastructure development plans announced along with planning budget penetration to rural areas. We see a boost to roads, railways & rural development.
– Rs 25000 crores recapitalisation of PSU Banks may prove to be less as this year will be the year for cleaning up balance sheets across the board and we may still see some negative surprises in the sector. However the plan to soon propose a roadmap for consolidation of PSU banks and setting up of Bank Board Bureau headed by Vinod Rai is positive and shows that action is being taken on the subject. So in essence, the budget is providing short term boost as well as a structural road map for this important sector.
– Almost all negatives have been avoided like Long term capital gains tax, service tax etc.
Real Estate positives :
– Increase of HRA deduction at Rs 60,000/- , this is a broad based benefit.
– First time home buyers of homes less than Rs 50 lakhs to get higher interest deduction of Rs 50,000/-.
– Affordable housing sector has been identified for benefits on both cost and sale fronts in the development process.
– Extension of benefits to SEZs until 2020 provides time to realize associated benefits.
Government has announced a good structural approach to the country’s budget, it is now important that interest rates are reduced and private sector investment is accelerated.
It would have been better if the budget had made some positive provisions for home loans which would have made a significant positive impact on the economy.