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Union Budget: realty sector hopes for industry status

KOCHI: More than any stimulus, the builders may be looking to more clarity on certain policy issues as well as some hard decisions that will help the industry absorb the shock of possible scenarios like a further hike in petroleum and diesel prices and rail freight rates.

But first things come first. Builders here are hoping that there will be a hike in the income-tax exemption limit on housing loan repayment. Hopefully, the Budget will come out with an announcement raising the IT exemption limit substantially, to around Rs.2.5 lakh, said Abdul Azeez, Chairman of the Confederation of Real Estate Developers' Associations of India (Credai), Kochi.

He said that under the current rate of inflation, it would be a step that would encourage savings, especially among the salaried classes.

If the government is willing to extend the period of tax exemption for builders of smaller homes, now valid till 2012, it would help increase the availability of cheaper homes in the country, he added.

Under the current circumstances, smaller homes are becoming more difficult to build, considering the market conditions.

The long-standing demand from the builders that realty business should be given industry status has once again come to the forefront as the suggestions were put forward prior to the Union Budget.

Yet another point raised by the builders is that if the government can come up with Special Residential Zones, on the lines of Special Economic Zones, it would benefit the industry and integrated townships can be built out of the centre of the current urban areas, he added.

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