Here are some opinions expressed by market professionals regarding their expectations for the real estate sector in the run-up to the budget and the proposed FSI hike in Mumbai that may have an effect elsewhere too.
Reduction of interestThe main expectation from our end would be the reduction of interest rates and regulation of construction raw material costs such as cement and steel. Excise duty towards ready-mix concrete and steel fabrication should be abolished. Inflation has come down in recent times but the cost of construction has not and this has had an adverse affect on the industry. I would like to see the Government factor in rate concessions that are virtually non-existent today and also believe it is time to declare the sector a priority sector.
Nagaraj Reddy, President, CREDAI-Karnataka
On BMC’s proposed FSI hikeThere are reports that the proposed new development plan (DP) for Mumbai suggests an area-wise floor space index (FSI) up to a maximum of 8. Whilst this increase in FSI is surely a positive step, it is imperative that the FSI is not increased only on a piecemeal basis for individual plots. It has to be provided in a planned and holistic manner to areas where the infrastructure is also developed to keep pace with the increased demand pressures. The need of the hour is to have a comprehensive redevelopment plan for entire clusters / areas that have all necessary factors such as transportation infrastructure and public utilities such as water, electricity, sewage, drainage, waste collection, open and recreation spaces, etc. to support the new residential and commercial developments that get created.
Sanjay Dutt, EMD, South Asia, Cushman & Wakefield
Tourism and hospitalityThere is considerable optimism that the tourism & hospitality sectors will receive their due attention in the forthcoming budget. Some areas that require attention include:
* Rationalisation of service tax, luxury tax and VAT, and a uniform taxation policy across the country. Our present high taxes are driving tourist traffic to neighbouring destinations in Asia-Pacific that offer more competitive rates.
* A more effective Single Window Clearance mechanism across the country and a drastic reduction in the number of licenses required to open a hotel. Presently, one needs over 100 licences from as many departments to start a hotel in India.
* Infrastructure status to be accorded to this sector at a reduced threshold of Rs.30 crore.
* A definite review of the archaic Shops & Commercial Establishments Act and Contract Labour laws to bring them in sync with the requirements of the sector
Vineet Verma, Executive Director, Brigade Hospitality Services
