You are here: Home » Interim Budget 2019 » News
Business Standard

Housing sops will not change things for sector in any way: Andrew Holland

Whilst on the face of it, it is a positive, it's too small an amount to move the needle too much, says Andrew Holland

Andrew Holland 

Interim budget 2019
Interim Budget 2019

I like the support measures though the amount was on expected lines. That said, in terms of how they have done it has been more innovative than a vanilla farm-loan waiver. So, I liked that part of it. Then there are Individual taxpayers having taxable annual income up to Rs 5 lakh will get a and therefore will not be required to pay any As a result, even persons having gross income up to Rs 6.50 lakh may not be required to pay any if they make in provident funds, specified savings, etc. In fact, with additional deductions such as interest on home loan up to Rs 2 lakh, interest on education loans, contributions, medical insurance, medical expenditure on senior citizens etc, persons having even higher income will not have to pay any tax.

Whilst on the face of it, it is a positive, it’s too small an amount to move the needle too much. For instance, I don’t think this would lead to people rushing to buy high-end cars or bikes. I did not expect the government to roll back the (LTCG), which was introduced earlier.

There are also proposals for the real estate and the sector, but I am not convinced that it will significantly change things for the in any way. The government has tried to do something for the sector, which I don’t think will move the needle too much. I still do not understand how the problem of unsold properties will get resolved amid higher interest rates. While cosmetically the proposals look good, the ground reality is quite different and may not change very much.

Overall, the budget deficit seems fine but the borrowings by the government are huge for next year. This will likely keep interest rates elevated and as a consequence problems for the real estate and non-bank finance companies (NBFCs) are not likely to go away.

The author is CEO of Avendus Capital Alternate Strategies

(As told to Puneet Wadhwa)

First Published: Fri, February 01 2019. 17:21 IST