With the economy in midst of a sharp slowdown, the Union Budget for FY21 was being awaited with high expectations to act as a growth booster. However, the budget fell short of industry expectations, with no major announcement for accelerating growth, writes Shishir Baijal, Chairman & Managing Director, Knight Frank India.
Lowering of income tax rates with the removal of exemptions, may not lead to any meaningful boost to consumption. As far as the real estate sector is concerned, the industry was hoping that the Government would come up with measures to boost housing demand.
“However, the removal of exemptions under the new income tax regime, implying no tax benefit on principal and interest for home loans would be a dampener for the sector. The extension of benefit for affordable housing for the developers as well as home buyers by one year is a step in the right direction. As far as the funding constraint for the real estate sector is concerned, the government spoke about enhancing the partial credit guarantee scheme for NBFCs, which again may not suffice for the ailing real estate sector,” adds Baijal.