CEO SPEAK - `Grading of developers will help in instilling healthy competition'
KK Tripathi, senior vice-president (sales and marketing) of Ansal Buildwell Ltd, said in an interview with Times Property that to protect the interest of buyers and developers, the long pending real estate regulatory bill must be introduced in the Lok Sabha without further delay. The much awaited land acquisition bill is also required to fulfil the NDA government's vision of “Housing for all by 2022“, Tripathi said.
Ansal Buildwell Ltd started off in 1984 and is today one of the leading real estate players in the country. It has several self-contained townships projects in Amritsar, Jaipur, Gwalior, Moradabad, Pathankot, Jhansi, and Cochin.
Excerpts from the interview: HOW DO YOU SEE THE BUDGET?
WILL IT GET MARKET BACK ON TRACK?
The Union Budget is not positive or negative, it is so-so. Overall, we can say it is not a satisfying Budget for the real estate sector, especially at a time when the struggling market required a much needed push to bring back buyer confidence in the sector. Broadly speaking, increase in the limit of 80GG from Rs 24,000 to Rs 60,000 and the limit of 87A from Rs 2,000 to Rs 5,000 will give relief to small tax payers.
Focus on “Housing for all“ and 100% exemption from the income arising out of housing projects for flats up to 30 sq metres in four metro cities and 60 sq metres in other cities, will boost affordable housing projects.
It has also been proposed to provide an additional deduction on account of interest of Rs 50,000 for first-time homebuyers for loans up to Rs 35 lakh sanctioned during the next financial year, provided the value of the units does not exceed Rs 50 lakh--this can boost the sale of affordable houses.
HOW DO YOU RATE THE UNION BUDGET?
The budget is pragmatic, wide-ranging, and inclusive given the emphasis on infrastructure development.
It clearly lays focus on key areas of core sector growth, inclusion, fiscal farsightedness, and tax streamlining. There are quite a few sops for affordable housing and first-time buyers like service tax waiver, increased limit for deduction on interest repayment of home loans, and 100% deduction on profits made from affordable housing projects.
In addition, investment in infrastructure will also help affordable housing as it will connect affordable housing hubs with commercial centres. We look forward to the remaining Budget session to carry forward the GST bill and the real estate regulatory authority bill to further catalyse growth in the sector.
Affordable housing is a segment where the government should bring in tax-free status for developers, previously offered. We are keen that the real estate sector be given industry status, so that liquidity issues faced by developers are resolved to a large extent and help in attracting more FDI into the sector too.
DO YOU THINK THAT THE REGULATORY BILL WILL HELP BRING BACK CONFIDENCE AMONG BUYERS?
This is a great initiative to keep a significant portion of the sales proceeds in escrow account, as that would ensure timely execution of projects and check temptation of developers to use customers' funds in other projects.
It would also promote fair play in real estate and encourage investment in the sector. The bill has been drafted with the intent of protecting the interest of end users by promoting fair play in real estate transactions and focusing on time delivery of projects. It aims at a standardized regulatory environment which, in turn, will help in swift arbitration of disputes and ensure organized growth of the real estate sector.
Single-window clearance system is will help in cutting down the time and number of approvals. Grading of developers will also help in instilling healthy competition and give customers a transparent mechanism to evaluate investments. The bill will help in reinstating the trust of the general public in this sector by instituting accountability and transparency in transactions.