Budget 2021: Given the upstream and downstream linkages of the construction sector with other sectors of the economy and the urgent need to provide housing to large segments of the low-income population, the government should pay special attention low-rental housing in the 2021 budget, The Confederation of Indian Industry (CII) said in its 2021-22 pre-budget memorandum. Currently, the government offers a one percent interest subsidy for low cost home loans up to Rs 15 lakh, provided the cost of housing does not exceed Rs 25 lakh. Industry body CII suggests that the interest subsidy program should be extended to cover the full cost of housing up to Rs 35 lakh.
Commenting on measures to stimulate all segments of the real estate industry, Lincoln Bennet Rodrigues, founder and chairman of the Bennet & Bernard Group, known for its luxury vacation homes in Goa, said the government should further relax tax standards, push more reforms in goods and the tax on services (GST) and announce the status of industry to the real estate sector in the next budget.
According to Lincoln, the government could trigger a series of reforms and consumer stimuli to increase borrowing from banks to facilitate liquidity. There is also a specific need for income tax relief for a second home which will benefit buyers and also boost the real estate industry. A one-stop-shop could significantly improve the approval process and speed up project execution. The real estate industry also expects lower interest rates on home loans, a reduction in stamp duty, and registration fees that make a huge difference in the cost of a project.
In addition, industry body CII also suggests that the allocation under Pradhan Mantri Awas Yojana (PMAY) should be increased from the Rs 27,500 crore allocated in the 2021 budget.