Budget evokes mixed reactions from realty sector

February 29th, 2008 - 10:24 pm ICT by admin  

New Delhi, Feb 29 (IANS) The Indian real estate sector has welcomed the overall impact of budget while saying that it could have done more for the industry. “The budget will boost the socio-economic infrastructure of the country by giving due emphasis to education, health and hospitality sector. The budget has, however, not fully addressed the demands of real estate industry”, said Pradeep Jain, chairman of Parsvnath Developers Ltd.

“While we welcome the emphasis on education and health given by the finance minister, the long-awaited demand for industry status for real estate would have gone a long way in providing the desired impetus to the growth of the sector, which is highly capital intensive.

“The sops given to infrastructure and housing sector in rural areas are welcome. However, a reduction in duties and service tax benefits directly to consumers would have propelled the demand for realty across the country.

“The reduction in input cost of cement, steel etc. will definitely benefit the sector.

“A tax benefit for hospitals is a paradigm change and we expect a new generation of health technology entering tier-II and tier-III cities.”

Sanjay Chandra, managing director of Unitech Ltd, said: “The budget will have positive impact on the real estate industry. The construction costs are expected to come down due to duty and central value-added tax reduction.

“The housing sector will take a boost due to the increase in income tax exemption limit to Rs.1.5 lakh (Rs.110,000) and new tax slabs as it will increase the affordability of equated monthly instalments pertaining to new and existing housing loans.

“The real estate sector will also benefit from the amendment relating to dividend distribution from a subsidiary to a parent company, as this is prevalent in the sector,” Chandra said.

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