The budget 2013-14 was "missing the opportunity for growth" and lacked focus on affordable and rental housing and banking reforms, the Confederation of Real Estate Developers Associations of India (CREDAI) said Thursday.
It gave the thumbs up, however, to the proposal for home loan interest incentives for sub-Rs.25 lakh ($2.5 million) buyers, though more was expected, according to CREDAI president Lalit Kumar Jain.
First-time home loan borrowers in the sub-Rs.25 lakh category will be allowed an additional deduction of one lakh rupees, and the additional interest deduction of one lakh rupees for home loan borrowers would take the total allowance to Rs.2.50 lakh for all self-owned properties, Jain noted.
"The developer community is thoroughly disappointed that the finance minister has not given any directions to the RBI on the imperative to support real estate funding. We have been suggesting to the government for long to help revive the real estate sector to rejuvenate the economy by giving it an infrastructure status, a view supported by Union Housing Minister Ajay Maken," Jain rued.
Sachin Sandhir, Managing Director, RICS-South Asia, said that the budgetary announcements this year translate to a loud and clear message for real estate and construction sector.
"This is indicated in the bold step of doubling the outlay for the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and the Rs.one trillion target for infrastructure investment, and the Rs.2,000 crore ($362 million) urban housing fund," Sandhir said.
PriceWater HouseCoopers executive director, India, Gautam Mehra, said that the road map for development of the Delhi-Mumbai and Chennai-Bengaluru industrial corridors seem to be a positive step towards developing 'smart' cities, but re-introduction of TDS provisions will upset the developer community.
On the other hand, Sumer Infrastructure Managing Director Deepak Shah termed the budget as disappointing for home-buyers and realty sector.
Shah said that the one percent TDS on properties above Rs.50 lakh would discourage the industry in urban areas, and the pivotal requirement for mass housing by way of granting "infrastructure" status has also not come.
Hemant Kanoria, chairman and managing director, Srei Infrastructure Finance Limited, said it was heartening that infrastructure development figured prominently in the budget.
"The initiatives to provide support to Infrastructure Debt Funds (IDFs) are commendable, especially as the banks are constrained and unable to increase their exposure to infrastructure projects," Kanoria said, expressing hope the IDFs will be able to mobilise resources from a diverse cross section of investors with government's active participation.