MUMBAI: The government has continued its efforts to achieve the vision of ‘Housing For All by 2022’ with the Finance Minister Arun Jaitley announcing setting up a dedicated fund for affordable housing in Union Budget for 2018-19.
“My Government will also establish a dedicated Affordable Housing Fund (AHF) in National Housing Bank, funded from priority sector lending shortfall and fully serviced bonds authorized by the Government of India,” said Jaitely said in his budget speech.
The government has already reduced Goods & Services Tax burden of homebuyers in affordable housing category by 4% reduction to 8% with effect from January 25. This reduction in tax is applicable to up to 645-sq-ft homes purchased by availing the Credit Linked Subsidy Scheme (CLSS) under the Prime Minister Awas Yojana (PMAY), as per the changes recommended at a recent GST Council meeting.
“We see some strengthening of the affordable housing sector in the form creation of Affordable Housing Fund under the National Housing Board. This will allow better access to capital for related developments in urban and semi – urban areas,” said Ramesh Nair, CEO & Country Head, JLL India.
The government has been pushing affordable housing in a big way for the past three years. In addition to granting infrastructure status to affordable housing in last year’s Union Budget, it has also offered PMAY benefits to push its vision of ‘Housing for All by 2022’.
“Under Prime Minister Awas Yojana (Rural), 51 lakhs houses in year 2017-18 and 51 lakh houses during 2018-19 which is more than one crore houses will be constructed exclusively in rural areas. In urban areas the assistance has been sanctioned to construct 37 lakh houses,” Finance Minister said.
However, the industry had expected the government to offer further support to this segment in addition to other reliefs.
“Real estate sector had significant expectations but the Budget did not deliver on a majority of them… From a tax perspective, the sector did not receive any benefits albeit a minor relief in the form of a 5% range where real estate transactions are undertaken below stamp duty value…Given the contribution of the sector to GDP, its impact on employment and the slowdown currently in the sector, the Budget could have done much more for the sector,” said Gaurav Karnik, Tax Partner & National Leader, Real Estate, EY India.
According to Anuj Puri, Chairman of ANAROCK Property Consultants the announcement of regional air connectivity scheme to connect 56 unserved airports is a good news for business growth and office space demand in smaller cities, with a natural spinoff demand for housing on the back of job generation.