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Delhi-NCR: Budget 2016 to decide fate of Gurgaon

March 1, 2016

Millennium city Gurgaon has emerged as the real estate hub in the recent times. Top real estate giants as well as educational institutions are based in Gurgaon. This is the segment which will be most affected by the upcoming budget, therefore, it is of utmost important to understand what they are expecting from it.
Sluggish pace of development in the real estate market has been at the receiving end of government’s negligence for some time now.  Prospective buyers and real estate developers are hopeful that the 2016 budget will substantially ease their woes. There is unease in this sector that has affected both the developers as well as the buyers.

Real estate sector’s expectations:

Real estate sector has been dealing with a lot of clamour regarding the changes expected from this year’s budget, and here are some of the major expectations.

– Service tax exemption for residential housing. Residential sector should be removed from being taxable under provisions that make it chargeable at 14.5 percent. Since the burden of taxes is ultimately borne by the customer, the ultimate beneficiaries of such a move will be the buyers and investors.

– Offer financial protection/relief to buyers- This pressing need needs immediate regulatory provisions from government’s end. On purchase, buyers can claim tax-benefits of Rs 2, 00,000 on possession if construction is completed within three years. The benefits reduce to 30,000 in case of delay, and then investors pay higher interest. However, Union Budget should pave way for a provision that allows these starting from the time they start paying interest on housing loans.

– Besides targeted regulation of real estate sector to reinforce investor’s confidence, passing of Goods and Services Bill will benefit the real estate sector immensely.

“The real estate sector has been on a roller coaster ride ever since the economic slowdown in the latter half of last decade. However, in the recent past, it seems to be coming back on track. The government policies and legislations are responsible for the turn of events. The Union budget is eagerly awaited by everyone; the reason is that the policies announced have an impact till the start of next financial year. Thus positive or negative, it is bound to impact anyone and everyone from whatever industry they are. The fact that real estate is on a recovery mode this year’s budget is very much crucial for the realtors. Home buyers should get financial protection in case of project delays. Additional allocations should be made for infrastructure development in peripheral areas of metros,” said Atul Banshal, president, Finance & Accounts at M3M India Private Limited.

“Real estate market is hopeful that Budget – 2016 will provide the much needed cheer after prolonged slump. Under tax consideration, we expect that financial protection will be provided to investors in case of delays from builders’ end. It will also help the buyers immensely if house rent deduction limit is raised for self-employed persons as well, as maximum limit that can be claimed under Section 80 GG is a meager Rs. 2,000/- per month,” said Rajesh K Gouri, vice president, Homestead.

Education sector’s expectations:

– Seeking the government’s skill development initiative and integration of education in Digital India programme as well.

– Educationists are also focusing on building infrastructure for activities such as incentivising institutions that facilitate skill building.

– Improving access to gaining technical skills.

– Making sure that prime minister Narendra Modi’s ambitious Skill India programme of equipping 40 crore youth by 2020 is a success.

“The biggest challenge for ‘Skilling India’ mission is “matching the skills” of youth with the employers “seeking such skills”. Currently, India has a large number of states which are industrially backward and with large rural population. While the catchment areas are in states such as UP, Bihar, Jharkhand, Uttarakhand etc. the jobs are available elsewhere especially in the industrially advanced states like Tamil Nadu, Gujarat, Maharashtra, Karnataka, Punjab, Haryana etc. Incentivisation to set up manufacturing units in industrially backward states and rural hinterlands is a must to make the “skill mission” with employment linkages successful. ‘Apparel Manufacturing’ is not only suitable for the whole family from the age of 18 to 55, but more importantly, adequate skills can be trained in 45 days to 60 days. It is also most suitable for women and rural youth to find employment approximately earning Rs. 6500 to Rs. 8500 per month to begin with in both export or domestic manufacturing units. The government needs to bring in favourable policies and fiscal incentives to encourage apparel manufacturing industries to be set up in rural areas of industrially backward states. It is also necessary to encourage setting up of dormitories and such facilities for workers so that trained workforce from ‘less industrially developed states’ could go and work in more ‘industrially developed states’,” says Dr. Darlie O Koshy, DG & CEO, ATDC.

“The outcome of higher education affects the employability of youth and development of a nation. However a serious concern is the quality and utility of education in this segment. We expect that the government should provide better provisions to grant funds for projects and research in private universities. The private and autonomous universities should also be supported in developing better infrastructure to improve quality of education. The government should also be more liberal in providing affordable education loans, with terms of repayment extending to 10 years,” said Colonel Bikram Mohanty (Retd), registrar, The Northcap University, Gurgaon.

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