Budget 2024: Realtors demand industry status, reintroduction of the interest subvention

In the upcoming union budget, scheduled for 1 February, the country’s real estate developers are demanding an array of measures from Finance Minister Nirmala Sitharaman. From the granting of industry status to the reintroduction of the interest subvention scheme, the realtors are expecting a slew of measures that, they expect, will help grow the sector.

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According to Manoj Gaur, Chairman & Managing Director, Gaurs Group and President of CREDAI NCR, the real estate has pinned high hopes on the forthcoming budget. “First of all, the sector is looking for the reintroduction of the interest subvention scheme to revive mass housing. Secondly, we are also seeking a redefinition of affordable housing, and the limit for it should be raised from 90 sq mtr in terms of space and 45 lakh in case of pricing. It will be a much-needed intervention as a considerable demand exists in the affordable housing segment. And lastly, we are also looking forward to announcements on GST input credit to stimulate growth and foster a more resilient real estate environment,” he says.

Amit Modi, Director of County Group is asking for the industry status. “One of the primary expectations from Budget' 24 by the real estate sector is the grant of industry status. The construction industry is a significant employer, especially with a considerable portion being unskilled and casual labourers, so conferring industry status would catalyse growth. It aligns with the national vision of providing housing for all and generating employment. Anticipated measures also include implementing a single window clearance system and a focus on promoting affordable housing,” he demands.

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Pradeep Aggarwal, Founder & Chairman – Signature Global (India) Ltd. & Chairman - ASSOCHAM National Council on Real Estate, Housing and Urban Development, concurs with Modi. Apart from the industry status, Aggarwal is batting for a few additional measures like single window clearance, revision of GST input tax credit rules, and increasing home loan interest rate rebates for homebuyers.

“Despite reduced GST rates on residential and affordable housing, the absence of input tax credit under these rates hinders developers' ability to offset taxes, impacting overall project costs. We appeal for a unified GST and solution for claiming input tax credit for all construction materials, anticipating a reduction in property prices and greater transparency in the process. The government should [also] emphasise on stimulating the housing market by revising home loan interest rate rebates under the Income Tax Act. The proposal calls for an increase to a minimum of Rs 5 lakh, aiming to attract genuine homebuyers and significantly boost demand,” says Aggarwal.

According to Ashwinder R Singh, CEO Residential, Bhartiya Urban, key measures like simplified clearances, tax breaks, and GST adjustments are essential. “There's a call for a thoughtful plan for affordable housing, tapping into untapped potential and unmet demand. As we await the budget, all eyes are on the government's proactive steps, hoping for a roadmap that boosts growth and resilience in the real estate sector.”