The Budget is exciting and needs to be studied in depth. But overall there is a clear approach towards infrastructure and growth. As far as the realty sector is concerned, there are good policy initiatives that can put the industry on fast track growth.
The plan for skill mission enhancement is an urgent need for all industries, particularly so for real estate. Due to less skilled human resource available in the industry, there is a perennial challenge in maintaining quality with competitiveness.
Skill set is important for national growth and the conventional education system that has been deep rooted in our economy is proving to be a challenge. Individual interest on specific skills will enhance market growth.
The plan on regulatory reform for infrastructure and single-window clearances will enable more overseas investment into the sector.
As regards the increased allocation for infra fund, road outlay and rural and urban housing plan will kickstart additional employment opportunities and deployment of trained manpower.
Rationalised capital gains regime for REITs/InvITs and wealth tax abolition will enable additional investment in the sector. Perhaps this will make the investment more transparent without worry of additional tax.
Some challenges that face the industry are on the roll out of GST. Since many states were anticipating early implementation, the deferment to 2016 April is a dampener.
Introduction of GST will rationalise tax structure of the sector, which will make it transparent and uniform.
Smart cities announced earlier need implementation. Once a clear policy on this is announced, the Industry will get extra ammunition.
The concept and contents of such development will involve real estate industry to a greater extent. Investment and marketability of such projects, once promoted by the state will make it more attractive and investor friendly.
Increase in excise duty and service tax will be adding to the cost of investment. When the industry faces challenges from input cost, this will only add to the burden. The increases need to be passed on to prospective customers and this is not the best of times to do so.
The real-estate sector has been seeking priority sector status for decades. Since the industry faces challenges in organising finance and other facilities with respective local governments, the status of priority sector will improve functionality and workability.
Control on certain commodities like cement, steel and sand is essential for the sector. At present the challenge is on increased cost and short supply. A national policy on these essential commodities for construction needs to be looked into by the Centre, in consultation with all the States.
In total, there seems to be a good approach in the Budget to the overall economy. The real estate sector benefits from all Budget-related activity and 2015 looks very promising. Final outcome of the Budget will be known after the Finance bill is cleared by the Parliament.
(The author is Secretary, CREDAI Bangalore)