What does the real estate sector want from Budget 2021?

The year, 2020 has changed the normal course of life due to COVID-19 pandemic. The real estate sector has faced unprecedented challenges since the outbreak of the pandemic in India earlier last year. The government and regulators have continued to provide with fiscal and policy support to the industry.

Land is an important resource for any real estate development. Most developers have limited resources to acquire land with 100% ownership. The alternative to this is joint development on an area basis and for revenue sharing.

Since the implementation of GST on T.D.R is being interpreted for application of GST on the transfer of the right to develop the land. Due to these amendments, the number of projects, whether residential or commercial has reduced significantly.

In this budget, if there is a relaxation on GST for joint development transaction on T.D.R, it will be a huge incentive for developers to take up projects for development. This will also bring about huge direct and indirect employment opportunities in the country.

Presently the input on GST has restricted. The government should consider allowing input of Commercial GST against the rent receivables. Also, a waiver on the applicability of GST on T.D.R. allocated by the government as well as market purchases to improve the production potential for any project.

PMAY’s Credit Linked Subsidy Scheme (CLSS) which is currently extended until March 2021, is expected to be further extended until March 2022 for another year. This will only further benefit the low-income group planning to buy a house to avail the CLSS subsidy.

Industry status to the real estate sector will further boost the flow of low-cost funds, cut capital costs and make land acquisition easier, passing the benefits to consumers. To speed up project execution, a single-window clearance system can also aid in the growth of this sector.