Most industry stakeholders are ruing the fact that the second largest employment-generating sector — real estate — has been treated as though it did not exist by the Union Budget 2008-09. Jones Lang Lasalle Meghraj chairman and country head Anuj Puri said, “This budget has not given much direct attention to the needs of the real estate sector, except in peripheral ways.” Era Group chairman HS Bharana offers a possible explanation: “The sector is in a state of self-stabilisation and we are seeing the process of a slight correction now. It will take some more time to stabilise.” However, “The budget will have positive impact on the real estate industry,” said Unitech managing director Sanjay Chandra, adding that, “Reduction in cenvat rates and increase in income tax exemption will increase affordability of EMI’s pertaining to new and old housing loans.”Puri said, “The raising of allocation for the Bharat Nirman Yojana to Rs 31,280 crore is a step forward.” He added, “We can anticipate increased supply of land across all sectors of real estate as a result of this investment in infrastructure…in the mid-to-long term.” Another measure that is sure to impact the sector positively is the grant of Rs 473 crore for computerisation of land records, strengthening of revenue administration and updating of land records.More positives for the industry are likely to come about with tax holidays for hospitals and hotels. CB Richard Ellis managing director (south Asia) Anshuman Magazine said, “The five-year tax holidays for hospitals and hotels will benefit real developers too, because the basic ingredient of these sectors is also land development.”Outlay for JNNURM scheme increasedThe Budget increased the budgetary allocation to Rs 6,866 crore, an increase of Rs 384 crore over the previous year for JNNURM. CBRE managing director (south Asia), Anshuman Magazine said, “JNNURM is an excellent scheme and the enhanced allocation is most welcome. It will give an added incentive to the states to rationalise stamp duties and reduce property tax reforms.”
