Have the government and RBI done enough to bail out the economy - and, by implication real estate? After all, the realty industry remains one of the most precise bellwethers of the state of India's economy. While the country waits for the first vaccines to roll out, Union Budget 2021-22 presents several opportunities to give the sector a shot in the arm, too. Given that real estate contributes more than 8% to the Indian economy, it has justifiable expectations.
Multiple measures were announced in 2020 to beat the unprecedented impact of COVID-19 on the overall economy and the real estate industry:
- RBI’s massive repo rate cut of 140 bps (leading to the lowest home loan interest rates in over 15 years)
- A six-month moratorium on EMIs
- Restructuring of loans of real estate companies at the project level
- At a state level, stamp duty reductions in Maharashtra
- A liquidity boost to NHB, and
- The first real-time deployments of rescue capital from the SWAMIH fund
These measures were proactive and commendable - but not surprisingly, given the depth of pain in the real estate sector, they were not enough. The housing industry needs focused measures to further bolster demand in 2021. This year, the demands go beyond the usual suspects of single-window clearance and industry status.
Affordable housing is very likely to get another booster shot. However, the budget also needs to focus on the larger market as
More than ever before, homebuyers and investors need focused tax incentives to get mobilized. Also, as the government is aware, developers' liquidity woes need to alleviated to forestall further market mayhem.
By Anuj Puri, Chairman - ANAROCK Property Consultants