I think the Union Budget has laid down a path for fiscal discipline. By doing this, the government has bought time — of almost one year — as the figures will come out next year. There could be so many unforeseen factors, which could affect fiscal figures and government policies. It might be a signal that the Reserve Bank of India (RBI) needs to launch more immediate steps in the next monetary policy.
As far as real estate sector is concerned, the government thinks real estate would rebound and contribute to national growth once Gross Domestic Product or GDP figures show increase. Real estate is the second largest employment provider in the country and one of the biggest contributor to the GDP, therefore, concrete steps need to be taken to develop the sector and in turn help the companies grow (and contribute).
The Finance Minister proposed a number of sops to boost the affordable housing sector such as allowing External Commercial Borrowings (ECBs), a lower withholding tax on interest payments on such ECBs, increasing investment-linked incentives for capital expenditure with respect to affordable housing project from 100 per cent to 150 per cent and so on.
These would definitely help the sector but only a part of it. The industry needs more also for individuals or prospective buyers to be encouraged to buy properties and help the sector.
Rajiv Talwar, Group executive director, DLF