A country’s economic health rides on how well its primary industries perform. It depends on how encouraged these industries are to expand, how many jobs they create in the bargain, to what degree foreign funds are attracted and encouraged to invest in various industries, and how much consumption increases because of all these factors. Despite laudable effort of the Government, a very large section of people stand to lose their comfortable or qualitative life of old age if they wish to buy or build a house as they cannot afford it. To address their difficulty, government should ensure building homes and offer them on rent for life time to senior citizens with terms of no subletting, no transfer, no modification and no inheritance.
The real estate industry has reasons to cheer as Union Budget 2017 announced infrastructure status for affordable housing. Housing companies acknowledged the beneficial changes to the affordable housing segment as it would give a boost to housing construction for low-income groups. But what is affordable housing? We need to have Rs 50 lakhs for a reasonable flat. The real estate developers suck the benefits as their profits, common people are made fools.
So far, India has only provided infrastructure status to industries and companies involved in the development of ports, airports, highways, public transportation networks, etc. By granting the housing sector infrastructure status as well, the new government will ensure that housing developers become eligible for critical incentives and subsidies at the Central and State levels. It will also mean that institutional lending to the housing sector becomes more liberalized – banks will increase lending to housing developers, who will also be able to raise bonds to help generate funding for housing projects.
Real estate is the most corrupt sector in India and most of the black money is parked in realty and if you go around any city then you will find millions of vacant plots, house and apartments. These vacant property might be sold by builders and developers to greedy “investor”. Even after sales slowdown builders failed to reduce the price. However, the government had undertaken demonetisation drive to clean up the black money. So we are expecting huge correction in price and the government should take measures to put a brake on the excessive bubble expansion in the Indian property sector, and we should curb excessive financing into the housing sector. Such as Tax savings on Housing loans and HRA should be completely eliminated. India’s current housing prices are more expensive than those during Japan’s property bubble, and are close to US prices just before the global financial crisis exploded. In Britain on the verge of a Brexit the real estate fuelled a house price crash and that was under stable.
Besides, timely delivery of infrastructure development as promised is one demand that all stakeholders are hoping from the government. The delay in infrastructure jiggles the entire risk and return dynamics for investors, developers, buyers as well as for occupiers. There are high hopes from smart cities initiative as well, thus everybody is expecting a well thought out implementation plan. For the industry to thrive, the economy needs to grow, jobs need to be created, and more income needs to drive demand for bigger offices, new homes, retail and hospitality. Thus, more than real estate incentives we are looking forward for the economy to grow.
(The views expressed by the author in the article are his/her own.)