Union Budget 2021- 22 is the much needed 'shot in the arm' for the Indian economy
(Time Zone: Arizona, USA)
Union budget 2021 - 22, announced by Hon'ble Finance Minister today reassures the country that the Government will take all steps necessary for a post pandemic economic revival and lay's path towards realization of aspiration of making India a 5 $ Trillion economy by 2024. As mentioned by the Hon'ble FM, 2021 is truly a historic year as India celebrates 75th year of independence.
Mr Satish Magar, President CREDAI National said "Increased allocation to healthcare with 35000 Crore for COVID vaccine in FY 21 - 22 will ensure that the vaccine reaches the most vulnerable sections of our country and it will in turn improve the overall customer sentiment and buying behaviour, aiding the revival of the economy. Continuous focus on expanding highways, developing infrastructure, road & rail transport, metro rail projects shall play a crucial role in connecting all corners of the country further boosting demand for housing in these areas, thereby promoting economic activity and job creation."
Mr Jaxay Shah, Chairman CREDAI National said "This is clearly a budget for growth with next level reforms, focusing on the healthcare, infrastructure and financial sectors and establishes a stable tax regime and higher borrowing for CAPEX. The Budget 2021 - 2022 has laid the stepping stone for India's post-COVID revival mission and has placed India on a global map in terms of resilient economic growth."
In line with CREDAI's recommendation Hon'ble FM announced an extension of tax holiday for affordable housing projects for another year till March 31, 2022 and deduction on payment of interest to buyers also has been extended for one more year. This will boost overall demand for affordable housing and it has been the fastest growing segment for the real estate sector.
To increase liquidity and access to required funding for the real estate sector, announcement of setting-up of a developmental financial institution with Rs 20,000 crore and allowing FDI of up to 74% in insurance, separate administration structure to promote ease of doing business are welcome steps. Announcement of Asset Reconstruction Company and Asset Management Company to help banks tackle bad loans will reduce the pressure on banking sector as NPAs shall now be handled by these entities.
Proposed amendments to allow debt funding through REITs, InvITs shall help in attracting more investments in Real Estate & Infrastructure sector. The proposal to make dividend payments to REIT and Invit's exempt from TDS shall encourage retail individual investors to explore investment opportunities in REITs.
However, popular demands of changes in IT slabs, increasing the limit of 80C, lower home loan interest rates and etc were not announced in the budget. The steps required to ensure more money in the hands of tax-payers to encourage spending was also not addressed. Touching upon the steep hikes in prices of steel and other metals, Hon'ble FM announced cut on customs duty on copper scrap from 5% to 2.5%, availability of essential construction materials with regulated pricing is crucial for the sectors growth.
Real Estate shall continue to be the preferred investment option as the announcements made by the FM in the budget will encourage many prospective home buyers to make a positive decision in this year.