By: Anuj Puri, Chairman – ANAROCK Property Consultants
Mumbai, February 02, 2019: The interim budget was more or less a vote bank-facing exercise – an electoral pitch that drew attention to past achievements. Vote-bank directed announcements included benefits to 12-crore small farmers via credit of INR 6k/year directly into their bank accounts, and also to 10 crore laborers by way of direct pension bonanza.
Direct and indirect positives for the real estate sector:
On the Downside:
All in all, this was a balanced budget for real estate, even though it was clearly configured as a crowd-pleasing electoral pitch with a cursory nod towards the ongoing challenges in the economy.
For the housing sector to regain significant momentum, the real need is to woo back the long-term investors who exited the residential market. One possible way was to re-introduce the home loan benefit on second homes. The Government’s move on this front is certainly welcome.
In mature markets, long-term investors keep the equity flow intact, and Indian real estate needs to have equity inflow rather than relying on debt. Equity can come through long-term investors and private equity or institutional players.
Definitely, no single Union Budget has ever actually come to the rescue of the real estate industry. Any incumbent Government perpetually walks a perpetual tightrope stretched between the expectations of various industries and compelling economic prerogatives. Also, there are always areas for which there are no quick fixes possible at all.
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