The real estate sector, which makes a major contribution to the GDP, has some expectations from the new regime at the Centre. A look by K. Sukumaran
Now that parliamentary elections are over, all sections of the society will be looking forward to the new government at the Centre fulfilling their long-pending aspirations and naturally, the real estate sector is no exception. Let us look at the major expectations of this vital sector, which has been a consistently major contributor to the GDP.
Before we list out these expectations, let us scan the promises of the major political parties and certain candidates in the election fray, which stood out even in the din and rhetoric of the election campaign/s.
At the national level, while the major parties have used substantial space in their manifestos for politically sensitive issues like support to the poor and weaker sections of the community, education to everyone, and reservation to minorities/women, very little attention has been given to issues such as how to prop up the low GDP growth of just around five per cent, or the nuts and bolts of this low growth (except the interest rate) and specific steps / action points for the growth of core industries. Same is the position with regard to real estate, except ‘provision for housing’, ‘infrastructure development’, ‘cheap credit to productive venture’ etc., which are often repeated in election speeches.
At the local level, many candidates spoke of the hardships of the common man like poor condition of roads, inadequate drinking water supply, and soaring prices. Specific local issues like the woes of sugarcane/cotton growers, land acquisition of farmers in Odisha, West Bengal or Gujarat, of course, figured in the speeches of some individual leaders. In metros, the propaganda by almost all focused on the poor living conditions of slum dwellers, lack of housing facilities to the marginalised and inadequate infrastructure.
In the above background, what can be the major expectations of the sector? Some projections can be:
Real estate being a major contributor of around 10 per cent to the GDP, any regime will support its further growth, at least till the industry picks up momentum. This means all tax sops available by way of interest paid on loans, repayments of principal etc., will be continued.
A relook into the Land Acquisition and Rehabilitation Bill, which is yet to become an Act, is a possibility, as a realistic balance between the demands of land owners and land using sections need to be made for the smooth implementation of the proposed provisions.
Industry friendly approach to land acquisition may be the cornerstone of any new policy as industrial production needs to be pushed up to jack up growth.
Global warming and climate change will dictate designing/redesigning of houses and construction pattern and as such, eco-friendly innovations in building technology may be boosted by extending concessions in providing financial assistance.
Metros may receive special attention in land use norms. Vertical growth in the central business districts may be promoted as a matter of policy.
Rural and middle income housing may be encouraged. At the same time, the interests of the farming community, especially that of the food crop growing community, may be protected.
Industry status to real estate sector, which is a long pending demand, is another possibility.
Some of the wish-list of builders and promoters like reduction/ avoidance of service tax, lowering of stamp duty and registration charges, and single window clearance may receive a close look.
FIIs in real estate is likely to get a boost.
The expectations can be sky high, but the challenges facing a new government will also be sky high. It is, perhaps, too early to expect solutions. Yet, one can surely say that real estate is a ‘milch cow’ and needs to be carefully nurtured.