Budget feedback of Shri Shri Sushil Mohta, Chairman, Merlin Group and President , Credai West Bengal
The 2021-22 union budget has been a sensible budget. It puts money into healthcare, sanitation, infrastructure and agriculture. Monetization of surplus land and huge investment on Metro, airport, and highways are good initiatives.
By and large this is a good budget focusing on growth in long term. We welcome the big picture of boosting the FDI, Ease of doing Business on the Tax administration and compliance.
a) There are no TDS coupled with applicability of the lower tax in case of tax treaty with countries. This will attract FDI particularly in commercial real estate and REIT.
b) The emphasis on health care, huge investment in infrastructure, manufacturing and agriculture is definitely a way forward for India to become a $5 trillion economy
c) In the context of West Bengal, the Government has committed up gradation of 675 km National Highways including upgradation of existing road connecting Kolkata to Siliguri with investment of 25000 Cr is a welcome move.
d) Another welcome move is a 20000 Cr allocation for capitalization of the bank by creating an Assets Reconstruction Company. This may ultimately bring much larger funds with 20000 Cr as base capital. The Government will also unlock surplus land which may be available for real estate projects in urban areas.
e) It is also a welcome move that there is lot of steps for ease of doing business which has been proposed by the Government by reducing the re-opening of
income tax assessment bringing faceless system in Appellate Tribunal, relief to NRI in their accrued income to avoid double taxation
f) Govt has allocated 35000 crore for covid vaccination and this will enhance the confidence of people to go back to work.
g) Govt is monetizing old assets and creating new infrastructure and attracting FDI in insurance.
These are all welcome initiatives.
But We expected necessary sops to the real estate sector to revive like reduction of GST on under construction projects and bringing back Input tax credit. We expected more liquidity to buyers to boost the consumption by raising the ceiling of the rebate on the home loan interest from Rs 2 lakh to Rs 5 lakhs. This could have proved to be a helpful measure to attract more and more customers to invest in properties.
Real estate is the second-highest generator of employment and contributes more than 8 per cent to the economy. Both the developers and buyers hoped that the Budget 2021 would introduce reforms like tax sops and correction in prices which could further benefit and stabilize the industry.
However the budget has extended the tax holiday on affordable housing to 31st March 2022 which will promote the launch of more affordable housing projects . This is a welcome decision. It has also extended deduction of Rs 1.5 lakh for loan taken till 31st March 2022. Kolkata is the city where 60% of projects are in the affordable segment category . I feel we would witness more launch of such projects in India.