23 July 2019

Report- Budget Reactions


A populist budget


Union Finance Minister Piyush Goyal on 1st February presented his maiden Budget in the Lok Sabha. In the “Interim Budget”, he outlined the government’s proposed vision for 2030, provided sops for middle-class tax payers and announced an annual dole for small farmers. Here are the reactions for the Interim Budget.



The interim budget for FY 2019 – 20 presented today by Minister of Railways & Minister of Coal, Piyush Goyal is very positive. We are pleased to see that the government has taken note of the issues faced by the real estate sector and has addressed them systematically. It has addressed both the demand and the supply side of the sector. For the demand side, the budget has ensured better liquidity and lower tax burdens on the purchase of homes. The benefit of rollover of capital gains has been increased from one house to two houses, upto INR 2 Crores (once in lifetime), is a tremendous step by the government that will boost sales in both primary and secondary markets. On a broader canvas, the changed direct tax implications including exemption of taxes till INR 500,000 p.a. automatically increases the disposable income, especially for the middle-income groups. We believe this step along with the increased standard deduction limit will in some way translate to an improved affordability for house purchase, thus aiding demand for the sector. A back of the envelope calculation on the new standard deduction rates and other direct tax sops give us a figure of an annual taxation exemption of almost INR 7- 9 Lakhs per annum. We believe that a fair part of the savings from this could be channelised towards real estate. Additionally, the provision of increasing the number of self-occupied properties from one house earlier to two houses now will augment the house purchase decision for people supporting families in another city/towns.


For the supply side, the government has taken into consideration the challenge of unsold inventory and has therefore increased the period of exemption for notional tax on unoccupied units from the prevalent 1 year to 2 years. This will give developers a big relief allowing them to concentrate on sales strategies. To further boost the affordable housing, the government has extended the benefits Under Section 80 (IBA) till 31st March 2020. The government’s commitment towards affordable housing continues and we expect to see more such projects coming into the market. The demand for housing is strongest in the affordable segment. The Finance Minister has also reiterated the government’s commitment to consider a revision on GST implications on the real estate sector by mentioning that a special committee is reviewing the same. This assures us that positive steps are being taken in this direction.  With all the sops announced by the FM today, the fiscal deficit being at predicted 3.4 % further spells reassurance of financial discipline. We consider this budget to be one of the best in many years for the real estate sector.  

Shishir Baijal, Chairman & MD, Knight Frank India






The budget is very encouraging and is indeed a welcome move. The government has taken into consideration the various sectors under organised and unorganised segments of the economy, an attempt, largely to filter the benefits of a burgeoning economy to the common sections of society. The key highlight was the benefits to empower the rural and agro economy.


While the budget did not include a singular and direct vision for the cement sector and industry at large, some key announcements on ancillary sectors will impact the cement industry in a positive way. The Vision 2030 for Next-Gen Infrastructure development which mentioned airports, inland waterways, road and rail development will definitely translate into great opportunities for infrastructure and construction business. This will also tie into the governments vision for employment increase as India’s push for rapid infrastructure growth will position the cement industry as an opportunity employer with 20,000 downstream jobs for every million ton of cement produced. The announcement to bridge the Urban and Rural divide and allocation of INR 19000 CR allocated for rural roads will be an impetus for the cement industry. The renewed focus on housing for all schemes are an opportunity of revised demand and therefore price rationalization as well. Another good news that came in was the hike in the Railways capital expenditure to INR 64,587CR in FY20. We are excited on the way forward and congratulate the government on this optimistic move.

Mahendra Singhi, President, Cement Manufacturers Association and MD & CEO, Dalmia Cement (Bharat) Ltd.






“The Union Budget 2019 is optimistic for the sector as it will provide ample opportunities for the home buyers to invest. Enhancing the exemption limit for the general category of individual taxpayers will increase the buying capacity of the potential home buyer thereby providing a boost to achieve ‘Housing for All.’ The Section 24 benefit of relieving second occupied houses from tax on notional income and the benefits of rollover of capital gains in two residential houses would help in reviving the real estate market. Raising the TDS threshold on rental income to ` 2.4 lakhs and bank deposits to ` 40,000 will be a huge relief to the taxpayers. Also, builders do not have to pay notional rent on unsold flats for two years after the year in which the construction is finished, which is a considerable step, given current scenario. Extending the benefits under Sec 80(i)BA for one more year for all housing projects approved till the end of 2019-2020 will further boost the demand in real estate industry. However, we were hoping that the finance minister will grant infrastructure status to the housing sector to give a fillip to the industry. We were also expecting single window clearance which would have been beneficial for both home buyers and the developers. We are now looking forward to the decision of the GST council that will help in reducing the burden on the homebuyers and give the necessary impetus to revive the sector.” 

Amit Ruparel, Managing Director, Ruparel Realty






We should see affordable housing get a boost as a result of positives mentioned by the Hon’ble Minister Piyush Goyal in his budget speech. Top of the list would be extension by a year of Section 80-IBA of the Income Tax Act, this will play a major role in helping achieve the target of ‘Housing for All by 2022’, and will incentivize the real estate industry to make more homes available under affordable housing, given that housing projects approved till 31st March, 2020 will be eligible for this incentive.”

Dr. Niranjan Hiranandani Co-Founder and MD, Hiranandani Group.





With the Interim Budget 2019-20, Government has announced to strengthen the Sagarmala Project which is a positive step towards transforming the nation through port modernization. The emphasis on port development will give a further impetus to PM Modi’s vision of Ease of Doing business in India. As per the World Bank report 2019 on Ease of Doing Business, India has taken a huge leap of 23 ranks from 100 in 2017-18 to 77 in 2018-19 indicating it is continuing its steady shift towards global standards. We welcome government’s push for ‘Trading across borders’ which shows an impressive improvement from 146 rank last year to 80th rank this year. Upgradation of port infrastructure, improvement of processes, and digitization of document submission has not only reduced Export/Import cargo handling time at ports but has significantly contributed towards improving the trading across border parameter and India’s impressive growth in the World Bank’s report.


We hope that the government’s focus on development of port infrastructure and capacity enhancement, improvement in last mile connectivity and development of multi-modal hubs to promote EXIM while reducing logistics cost and time will prove beneficial for the Indian economy in the long run thereby making India a global power house. We believe that initiatives like installation of Radio Frequency Identification (RFID) system at Major Ports to enhance security and remove bottlenecks for seamless movement of traffic across Port gates; DMICDC’s Logistics Databank system (LDB) deployment for tracking & tracing movement of EXIM container in the Major Ports thereby enabling the consigners and consignees to track the movement of the containers from LDB portal and Direct Port Delivery (DPD) and Direct Port Entry (DPE) enabling direct movement of containers from factories / port without intermediate handling requirement, thus saving cost & time will help in fulfilling government’s vision of Ease of Doing Business in India.

Piyush Sinha, Deputy MD, NEC Technologies India Pvt. ltd.




“The Interim Budget 2019 has remained focused on the nation’s economic growth and brings a positive sentiment in the real-estate industry. The government’s initiative to reduce the GST burden on the taxpayer coupled with tax rebates on incomes up to INR 5 lakh will help improve the purchasing power of individuals. Moreover, the decision to ensure a competent system to impose and collect stamp duties at one place helps in streamlining and creating an efficient structure within the industry.  With no notional rent levied on second self-occupied homes and the capital gains up to ` 2 crores which can be used for buying upto 2 houses, provide much needed impetus to the demand for homes. The deductions announced under Section 80IBA have been extended to projects which will be registered by March 2020-this again paves the way for new launches.


India today is now the second largest startup hub in the world, a promising note for the commercial real estate players, however extending SEZ benefits till 2020 could have added further impetus in this regard. The focus on next-generation infrastructure to provide Ease of Living shows the modernization that the country has well adapted to and thereby will boost the real estate sector too This year’s budget has laid the foundation for the performance of real estate sector in terms of boosting the economic growth and also enhancing the infrastructural development.”

Sanjay Dutt, MD & CEO, Tata Realty Limited





Even though, the budget 2019 is not a regular and only an interim in nature. We appreciate the Government of India taking proactive measures to help housing and real estate segment in particular. Besides this, the stress on housing for all, recognizing the need of the people who migrate from the native place to the place of work. The Government has permitted interest in exemption of IT for two houses. Similarly increasing or exempting tax for employed, the income of upto 9 lakhs will help the real estate segment.  We hope this additional benefits gives further fillip thereby giving a boost to readymix concrete industry in India.


Other than the real estate industry, most of the other infrastructure projects like roads, railways, ports, power, etc are already doing good due to ongoing projects. We would say 2019 budget is addressing and hope this additional benefits are addressing more to the real estate which was going through a tough time after post GST and RERA introduction.

V. G. Sakthikumar, Managing Director, Schwing Stetter India.




On many fronts this is a favourable and bold budget for the real estate industry. Though many of the expectations, whether it is bringing in a structured single-window clearance or granting infrastructure status to the industry didn’t materialize, however the government’s stance towards reducing the GST burden on homebuyers is seen as a welcome move.  In its ambitious quest to become a 5 trillion economy in the next five years, the interim budget, viewed as ‘Vision 2030’, has struck the right chord on several fronts, whether it is building next-gen infrastructure or building stronger digital India.The step of making more homes available under affordable housing is in-line with government’s vision of ‘housing for all’. Giving impetus to the real estate sector, by extending the period of exemption from levy of tax on notional rent, on unsold inventories, from one year to two years, from the end of the year in which the project is completed is a slight relief to the developer community. The proposed step to exempt levy of income tax on notional rent on a second self-occupied house is well addressed. Steps which include rollover of capital gains tax on the sale of houses from one to two houses & full tax rebate for individual taxpayers having taxable annual income up to Rs 5 lakhs is definitely a bold move and a great relief to the Indian salaried class.

Madhusudhan G., Chairman and MD, Sumadhura Group





“The budget announcement has been affirmative by opening investment market for second homes. Tax rebate for income up to Rs 6.5 lakh under 80C will accelerate investments in the housing sector. With RERA and Benami Transaction Act, bringing in tremendous transparency in the sector, there has been a surge in housing demand from the NRI community.


The government’s proposal to extend the period of exemption from levy of tax on notional rent, on unsold inventories, from one year to two years is a good rational move. The lowering of GST on properties is a positive move provided that ITC is continued thereby allowing a real reduction in prices to consumer.”

Boman R. Irani, Chairman & MD, Rustomjee Group