by Akhilesh K.Prasad,
As the year draws to a close, here’s a round-up of eight government announcements that mattered to the real estate sector:
Rolled out 1st July 2017, GST is expected to add transparency to real estate transactions. It may also increase the margins in the hands of the developer. However, whether that margin will translate into benefits for the property buyer remains to be gauged, as property prices depend on market forces and not on the principle of costing alone.
The real estate sector got its own regulator on 1st May 2017 when Real Estate (Regulation and Development) Act 216 was implemented. It aims at revamping the way this sector works across the board. The act seeks to protect the rights of the consumer and thus boost consumer confidence. It fixes responsibilities of the developer with respect to quality, timely delivery of their projects etc and intends to adopt international best practices.
On 17th November 2017, the government tweaked its flagship scheme, Pradhan Mantri Awas Yojna, following requests from the industry which was saddled with thousands of flats with marginally bigger carpet area than was eligible. It is expected to give MIG home buyers under CLSS, access to bigger, ready-to-move-in houses at lower costs. On the other hand, developers with large inventories could look forward to renewed demand, thus triggering a virtuous cycle of employment generation and economic growth.
On 20th November 2017, Minister of State for Housing Hardeep Puri said that the government is committed to linking Aadhar with property transactions. The move is expected to suck out black money from the realty sector, thereby rationalising prices. In turn, this is expected to boost growth and check profiteering.
Scheduled to be completed by August 2022, the 650 km long bullet train project worth Rs. 1.1 lakh crore from Ahmedabad to Mumbai, and proposed to be extended till Pune is expected to benefit the entire real estate corridor. The Bullet train is expected to have 12 stoppages including BKC in Mumbai, Thane, Virar, Boisar, Vapi, Bilimora, Surat, Bharuch, Vadodara, Anand, Ahmedabad and Sabarmati and will, therefore, provide fillip to realty in all these areas.
On 20th November 2017, the government furthered its flagship ‘Housing for All’ initiative by announcing to build 1 crore houses in rural areas. 51 lakh houses were proposed to be completed by 31st March 2018 and the remainder in the next year.
Recapitalization of banks and infrastructure package
On 24th October 2017, the government announced its decision to recapitalise public sector banks to the tune of Rs. 2.11 lakh crores. The move was lauded by the industry and the CII as a positive step to kick-start the credit cycle and facilitate private investment. At the same time, the government proposed to spend another Rs. 14 lakh crores on infrastructure development.
Green Urban Mobility Scheme to promote green transport system
In March this year, the government announced its Rs. 70,000 crore Green Urban Mobility Scheme to promote the use of hybrid or electric vehicles and non-fossil fuels among others for public transport, in order to reduce pollution and improve living conditions.