Budget Reaction : Gera Developments

“Given the challenging economic conditions, the Finance Minister has done a remarkable job. Showing a clear road map for farmers to double their income in 5 years, focus on infrastructure, capitalization of banks as well as reducing tax terrorism are welcome steps.

Government has given a major push to infrastructure in this budget by allocating huge funds for the road and rail sector. Announcement on development of new greenfield airports, revival of undeserved airports, highway upgradation, bringing stalled road projects back on track and constructing more rural roads will give much needed boost to the realty sector and put the smart cities initiative on a fast track.

On the subject of housing, there are a number of measures addressed toward the consumer as well as the industry with a view to address the housing shortage in the country.

The consumers are benefitted with greater interest deduction for first home buyers, as well as an enhanced deduction from Rs. 24000 to Rs. 60000 for rent paid where there is no HRA provision. 

For the industry, the objectives of meeting the housing shortfall are unlikely to be met for a number of reasons. First being that the project has to be completed within 3 years with the Occupancy Certificate (OC). Given the time, the OC takes leaves about 30 months to complete the project. When combined with the clause that the project must consume 80% or 90% of the FAR, means the projects will only be small sized so as to meet the time line criteria. Secondly, the bill says the scheme is applicable to the cities of Mumbai Delhi, Kolkata and Chennai and 25 km around these. For Pune Realty Sector, the scheme is applicable to the PMC and PCMC limits and not to the areas outside of the municipal corporations. However, for all other areas it is applicable only to the municipal or cantonment jurisdictions. This means areas outside the municipal limits are excluded from the scheme.  It is likely that this is a drafting error as the letter doesn’t match the spirit, but as written the scheme will not make a major impact.” – Mr. Rohit Gera, MD, Gera Developments & VP, CREDAI – Pune Metro