Budget 2014: Infrastructure will be one of the biggest focus of the Modi government, says Shishir Baijal

AppId is over the quota
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Budget 2014: Infrastructure will be one of the biggest focus of the Modi government, says Shishir Baijal - Economic Times You are here: Home>Collections>Affordable HousingBudget 2014: Infrastructure will be one of the biggest focus of the Modi government, says Shishir BaijalChandralekha Mukerji Jul 9, 2014, 10.50AM ISTTags:tax incentives|Shishir Baijal|settlement option|real estate|net worth|knight frank|interest rate|Insurability|Frank|chairman & managing director|affordable housing(Tax incentives with a focus…)

Infrastructure will be one of the biggest focus of the Modi government's five-year plan, so will be affordable housing. We talked to Shishir Baijal, Chairman & Managing Director, Knight Frank India, on how real estate will benefit if it comes under the infra-umbrella and other budget expectations.

1. What are the things on the industry's budget wish list? What are the main pain points that need to be addressed?

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One of the major challenges we are currently facing is there is no availability of funds and what is available is expensive. Also, realty hasn't received its due focus because of lack of industry status. So, the first thing on the wish list is infrastructure status to the sector. With this, the financial institutions and funds will have the required confidence for investment. This is likely to increase availability and bring down the cost of funds for the sector and widen the sources of funds.

We also face a lot of delays in approvals. This budget should highlight the importance of single window clearance across the country with an objective of substantially reducing the transaction cost which is incurred due to delays in approvals. FM should also allocate higher budget for urban infrastructure. Moreover, the demand is sluggish from the past few months. Tax incentives with a focus on middle income housing by enhancing deduction on housing loan interest and principal payment would support the house buying decision and propel demand.

2. What are the issues faced by home buyers that the government can help with?

At present, the biggest need is greater transparency and enforcement of fair agreement between buyer and seller. In this upcoming budget, we expect the government to lay down a strategic path for bringing in a regulator in the real estate sector which would implement transparency across all the states in the country.

Apart from this, higher subsidy for affordable housing projects will definitely make homes within the reach of common man. Also, city specific definition of 'affordable housing' for availing the benefits of interest rate subvention scheme is a more practical approach. Various indirect taxes on housing need rationalization as well. The FM could re-look and increase the current tax deduction available for repayment of principal amount and interest payment of housing loan.

3. Any pending schemes/proposals that needs further work from the new government?

There are three—Real estate regulation bill, Land Titling bill and Definitive measures on implementation of REIT structure and real estate regulator. It will be great if we get clarity on these as soon as possible.

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