The government must have a strong objective in 2020 improving economic development. Policies should be specifically focused on generating mass demand and employment because a slowing economy underscores the importance of real estate as an option to boost GDP rate; also to bring back growth in the real estate sector, which is so vital to any developing economy, it is significant for the government to impart industry status to the real estate sector which would allow developers to cut capital costs and pass on the profits to consumers.
Similarly, there is an serious need to decrease not just cost of permissions, but also the GST rate on raw material like cement and steel, which impact cost of construction. Likewise, premium on FSI and cost of land acquisition needs to be rationalized. We are also expecting a single-window clearance mechanism which has been a long-pending request from the sector as it will help in faster completion of projects. We also believe the execution of land reforms and greater liquidity to NBFCs in the market, which will prompt more promoters to come in.
Apart from these, exclusion of taxes on empty property, reducing circle rates section from Income Tax Act, increasing the bound of interest deduction compensated on a home loan, safeguarding tax rationalization on REITs and take down costs of land acquisition are some of the actions that will positively impact the sector.
As we look forward to 2020, while pursuing desirable macro-targets at the national level, such as a $5trillion economy by 2024, India’s economic policy should be more sensitive to regional and sectoral diversities which will help in streamlining the industry in the long-run. We hope the government to take more developer and investor-friendly decision for the progress of the real estate market in the coming budget.