On a daily basis, crores of Indians sleep under the night’s sky, not by choice but by force. They obviously don’t own a house and can’t afford to rent one. For them having a roof over their head may seem like a farfetched dream. But if India’s revered FM, Arun Jaitley is to be believed, then this dream might soon turn into a reality.
“A roof for each and every family by the year 2022” was the call taken and announced by India’s honourary finance minister as he declared the grand plan to develop and maintain over 2 crores modern houses in urban India and over 4 crores houses in rural areas by the end of year 2022. The plan is expected to be executed by state governments under constant supervision and guidance from central government. These sturdy and all weather homes are going to be equipped with 24 hour uninterrupted power supply, wide roads, toilets and clean water supply.
But the industry experts were left far from impressed. They called FMs statement a mere quote of intent with little or no clarity about how this mass housing scheme will be accomplished and provided to the common man. No specific detail was shared and neither any light was shed on the project locations, exact timelines, fund allocations, funding instruments and entities in the Sardar Patel Urban Housing Scheme. Instead many cautioned against a probable increase in raw material costs.
Real estate developers have faced the wrath of three consecutive bad years and were hoping for a favourable announcement regarding the future of affordable housing and housing for all. Major parts of India’s population who sustain without a roof over their heads on a daily basis were hoping for the same. But unfortunately the budget has left everyone high and dry. The budget was however slightly more kind to real estate players in a few other aspects.
Government allowed rationalization of capital gains on transfer of assets to REITs. The move has taken care of one of real estate sectors most crucial and impending demand. Thus every asset transferred by the real estate developer to the REIT will not be taxable from now on. Also the Benami Transactions Prohibitions Bill is all set to prohibit Benami transactions in the real estate sector and thus will provide a much needed stimulus for investments in the already bleeding sector.
But on the other hand service tax was raised to a mammoth 14%. When you club that with a hike in excise duty, the inflation is bound to increase in the real estate sector and the burden of these additional costs will be passed on to the buyers.
The budget has thus failed in spreading a smile across people dreaming of their own home and the heavily gasping real estate sector. Therefore the talk of home for all by 2022 seems like talk with little or no substance to back it up. It is thus high time that the government comes out with crystal clear action plan as to how it is going to achieve the so far unachievable mission of housing for all. The people of India are counting on them and the government is more than capable of materializing it.