Union Finance Minister Arun Jaitley presented the annual budget 2018 on Thursday making several announcements in a bid to boost the economy. The budget also encircled several pro-poor allocations pertaining to tax, housing schemes etc.
Expressing his views on the recently announced annual budget, Khushru Jijina, Managing Director, Piramal Finance & Piramal Housing Finance shared some insights.
The Union budget 2018 was a pragmatic one and focused on fortifying the economy as a whole. The Government’s endeavor to provide housing to every poor citizen by 2020 through the establishment of a dedicated affordable housing fund in the national housing bank, along with priority sector status being granted, is a commendable one. The government assuming ownership of National Housing Bank (NHB) from Reserve Bank of India (RBI) is also positive as it would translate into the focus of NHB shifting from regulation to development.
The reduction of the GST rate from 12 per cent to 8 per cent on affordable and low-cost housing units last week was a welcome reform. Building 31 lakh homes in 2018-19 in urban areas and a further 51 lakh in rural areas will go a long way in addressing primary housing demand.
Overall, the strong economic impetus provided in the budget will ultimately boost housing and real estate. The introduction of long term capital gains tax at 10 per cent on equities will also have an indirect impact on making an investment in real estate (over listed stocks) more attractive than before. Tax breaks being granted to senior citizens and salaried employees will increase their disposable income available for making capital purchases. A push on infrastructure comprising public investment in the rural areas, agricultural marketing, urban connectivity, particularly Metros etc will also multiply investment prospects for real estate sector.
The article has been written by Khushru Jijina, Managing Director, Piramal Finance & Piramal Housing Finance.