Budget 2017-18: Nahar Group reactions on Jaitley’s speech in Lok Sabha

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NEW DELHI (INDIA): Nahar Group CMD Sukraj Nahar said that the government has expressed the vision of housing for all by 2022 so in that sense the budget showcases a long term vision. We are hoping that the government should sound action plans that would follow their intent expressed. It was vastly anticipated that the budgets would arrive at correcting the market drawbacks as a whole.

However mid segment, which is the largest seem to have been ignored, leaving little room for the property prices to be within reach of the common man and would remain high compared to the average income of individuals. The tax relief given to developers who are constructing inventory less than 30 sqmtrs per unit to around 40 sq mtrs doesn’t help much either since most of the buyers are looking for houses ranging from 350-450 sq ft carpet from the mid-income individual’s view point that too in Metros or even Tier II cities. Hence this does not provide any boost in terms of end user sentiments, said Nahar.

“The reduction in long term capital gains from 3 years to 2 years with 2001 as a base year of indexation could be viewed as a step towards enhancing the secondary market. The Budget has implied a number of measures that could potentially increase job creation and increase the money in the hands of the consumer through lower tax rates in certain income bands, which could positively impact the overall buyer sentiment in the real estate sector. The Budget has confirmed the roll out of the GST but however has refrained from touching on the multiple taxation under REITs that could provide an additional funding avenue for developers focused on the middle and premium ends of the spectrum,” added Nahar.

“Housing loans for the common man, complete clarity for a ‘less cash’ nation will be an advantage. On the other hand, the infrastructure sector of the Indian economy still continues to be one of the priorities pushing the economy in the progressive course. Given the budget announced that most documentation will go digital, we are expecting the timelines including online clearances for new infrastructure projects to improve,” he added.

“Certain big ticket projects which meet specified criteria should be given a fast-track route.The Indian rupee has been witnessing turmoil against the dollar ever since the beginning of this year. The Indian currency tested the 28-month low of 68 against the dollar – this has also resulted in the Global economic slowdown, the tax exemption limit going up as a result of the budget, will reduce multiple tax loading and encourage investments in affordable homes, ” he said.

Affordable Housing will be given Infrastructure Status

The Union Minister for Finance and Corporate Affairs, Arun Jaitley while presenting the General Budget 2017-18 in Parliament said that affordable housing will now be given infrastructure status, which will enable these projects to avail the associated benefits.

The National Housing Bank (NHB) will refinance individual housing loans of about Rs. 20,000 crore in 2017-18. Thanks to the surplus liquidity created by demonetisation, the Banks have already started reducing their lending rates, including those for housing. The Finance Minister Shri Jaitley in his Budget Speech said that in addition, interest subvention for housing loans has also been announced by the Prime Minister Narendra Modi.

GST Council has finalised its recommendations on almost all the issues based on consensus

The Union Minister for Finance and Corporate Affairs,Jaitley said that the GST Council has finalised its recommendations on almost all the issues based on consensus after spirited debate and discussions.

The Finance Minister said that the Government on its part has promptly given effect to various provisions of the Constitutional Amendment Act, including constitution of the GST Council.

The GST Council held 9 meetings to discuss various issues relating to GST, including broad contours of the GST rate structure, threshold exemption and parameters for composition scheme, details for compensation to States due to implementation of GST, examination of draft model GST law, draft IGST law and the Compensation Law and administrative mechanism for GST.

He said the preparation of IT system for GST is also on schedule.

The Finance Minister Jaitley in his Budget Speech further said that the extensive reach-out efforts to trade and industry for GST will start from 1st April, 2017 to make them aware of the new taxation system.

He said that since the enactment of the Constitution (One Hundred and First Amendment) Act, 2016, there has been substantial progress on preparatory work towards ushering in GST which is by far the biggest tax reform since Independence.

“Several teams of officers both from the States and Central Board of Excise and Customs (CBEC)have been working to give finishing touch to the Model GST law, rules and other details, he added.

Jaitley said that the Government, through the Central Board of Excise & Customs (CBEC) shall continue to strive to achieve the goal of implementation of GST as per schedule without compromising the spirit of co-operative federalism.

He added that the implementation of GST is likely to bring more taxes both to Central and State Governments because of widening of tax net.

The Finance Minister Jaitley stated that not many changes have been proposed in current regime of Excise & Service Tax in the Budget proposals since they are to be replaced by GST soon.