Tag Archives: Pranab Mukherjee

Realty players demand Industry status and affordable housing as a priority from the Budget 2012-13.

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The Union Budget 2012 to be presented by the Finance Minister Pranab Mukherjee is being looked at to provide relief in terms of policy reforms with the real estate sector of the economy coming under repeated credit pressures owing to high interest rates for borrowing.

Experts say that the real estate sector needs government support as well as further stimulus to get out of the current slump. With the first step, experts have sought industry status for real estate, since the sector is a major driver for economic growth and generates countless jobs across its various verticals and associated industries. Experts this feel will also help the sector raise debt from FIs at a much lower rate.

Common demand across all real estate companies is that of an industry status being assigned to the sector in the Budget 2012-13 with ways to make affordable housing available to a larger section of the society.

Samir Jasuja, founder and chief executive officer at Prop Equity said, “In this budget, we expect the central government to grant the real estate sector the industry status as that would help the reeling sector raise debt from financial institutions at a much lower rate, which may partly improve the liquidity crunch crisis.”

Budget 2012: A ray of Hope for the Real estate sector.

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The real estate industry is very optimistic about the coming budget 2012 as the budget may bring a sheer relief  for the affordable housing buyers.

Real estate industry generates countless jobs across its various verticals and also the sector is a major driver for economic growth so it is  hoping to get an industry status.

To improve the significance of the housing sector sufficient steps were not taken in the Budget 2011-12 which in return gave very less to the developers and customers.

Shailesh Sanghvi, Director, Sanghvi Group of Companies said that,”We expect revision in tax for affordable housing projects in order to address the acute housing shortage in the country.”

The priority must be given to the banks who  in return offer concessional costs to the common man and also affordable housing should be considered important .

The interest subvention of 1% on home loans could be raised from Rs 20 lakh to 30 lakh.

In addition Ajmera also said that “The budget should look forward to extending the existing benefit of Section 80 IB(10) of the IT Act for developing affordable housing as the country is still in a huge shortage of tenement.”

Government must take steps which in return would be beneficial to both developers and also buyers. Real Estate sector is hoping the best from the Budget 2012.

As per the developers, Pranab Mukherjee, must present such a Budget that should bring happiness,joy and comfort to every sector.

 

 

Real Estate Prices To Increase

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Sansad Bhavan
Photo by It is very likely that the Real Estate prices in the country will shoot up further with the Finance Ministry’s decision of not withdrawing 2.5% service tax. This move was proposed by the Urban Development Ministry in the budget of FY10-11.

The budget had earlier proposed this tax on all under-construction projects. And it is common knowledge that eventually the customers will have to bear the burden and not the developers.

The declination came as no less than a shock to the Urban Development Ministry. Its Minister Mr. S Jaipal Reddy argued with the Finance Minister Mr. Pranab Mukherjee in the favor of the move in April this year but it could yield no results evidently.

The ultimate sufferers will be the Indian middle class who already has to bear the burden of inflation in almost all other spheres but also dreams of owing a home of their own!

Memorandum to Govt. from CREDAI to Take Off Service Tax

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Ministère des Finances QuébecApril 14, 2010

A memorandum has been submitted to the Finance Ministry concerned with the appeal for removal of service tax on housing complexes under construction by CREDAI, Confederation of Real Estate Developers’ Associations of India which is a real estate industry body.

The Chairman of CREDAI, Kumar Gera stated that they have put forth their concerns and suggestions and also discussed the probable impact of the provisions with the Ministry. An understanding of the problem and required corrective steps will be taken is a hope from the government. The list of recommendations was built in consultations with KPMG, its knowledge partner and was submitted to Y G Parande, a Finance Ministry Member (Budget).

According to Gera, the money collected through the imposition of service tax on real estate development will not be big enough; rather it would majorly lead an overall negative sentiment and a net loss of revenue.

In budget 2010, it was announced by Mr. Pranab Mukherjee, the Finance Minister that a tax would be imposed on the housing complexes under construction but later it was clarified by the officials that service tax would be imposed on 33 per cent of total selling price. This was interpreted by the real estate players as a 3.5% price escalation for the buyers.

According to CREDAI, it was an impractical proposal to levy service tax on construction of complex since would lead to government giving preference to the secondary market of completed projects.

Truth Behind Declining Realty

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Pranab Mukherjee

FINANCE MINISTER MR.PRANAB MUKHERJEE


Few days after the budget is announced the Realty Industry started showing discontent in concern with the service tax policy announced by the union finance minister, Pranab Mukherjee. The Confederation of Real Estate Developers’ Association of India (CREDAI) with the Surat Builders association wrote a letter dated March 5 to the finance minister, Pranab Mukherjee asking to withdraw service tax imposed on sales and renting of commercial and residential spaces.

In the letter to the Centre, the association has also said that a inclusive action plan for urban housing is necessary as there is a shortage of 27 million houses in the country presently.
President of Surat Builders’ Association and the vice-president of Gujarat chapter of CREDAI Tarun Rawal said that if we look at the population explosion in the city the figure has gone up to 46 lacs very fast but there is a shortage of about 5 lacs shelters in the city itself. He added that the need for sustainable housing in most of the big cities is huge and to fulfill that we must have a central policy and plan to guide it.

The association compels the Union finance minister to look into the matter of service tax imposed on housing sector as the sector is crucial for growth to create affordable housing. Slum re-development and integrated township incentives are also required. “Only if this is provided the sector will be able to fulfill the need of a growing nation,” said Rawal.

It is argued by real estate developers that the imposition of service tax will eventually make buying houses more difficult for the middle and lower classes. Similarly, service tax on rented property will adversely affect sectors like IT sector since they are already showing declining trend when the US restrictions have affected them.

What the finance minister decides is what should be looked for now.