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Infrastructure And Real Estate Measures By The Government Proves To Be A Fillip To Your Own Home Own
It also facilitates a steady inflow of private and foreign investments and thereby augments the capital base available for the growth of key sectors in an economy, as well as its own growth, in a sustained manner. With rapid urbanization, a growing economy, an every increasing per capita income and policy support from the government, the real estate market is expected to surge from annual market size of 126 billion USD in 2015 to 180 billion USD in 2020. This growth will be supported by the substantial quantum of capital infusion, which is a key catalyst factor from the developers/constructors’ point of view. As two of the largest employers in the country, both the real estate and infrastructure sectors have made great strides in the last decade and have received the attention of key policymakers, banks and corporate to formulate and implement regulations. In order to equip the nation with world-class infrastructure and real estate in a time-bound manner, considering the paucity of public funds available to stimulate their growth, it is imperative that additional channels of financing are put in place.
The overall development of the country is shaped by well developed infrastructure. Sustained development of the country’s infrastructure complements the growth of other sectors, leading to the overall development of the country. The Indian real estate sector is the second largest employer and contributor to economic activity in India, and accounts for the second highest inflow of foreign direct investment (FDI). The sector employs more than 35 million people. In India, 50% of the demand for construction activity comes from the infrastructure sector; the rest comes from industrial activities, residential and commercial development, etc. Given the significance of the sector in the overall growth of the economy, this sector has recently received a great impetus from the government, both in terms of policy initiatives as well as rationalization of tax reforms. Also, India’s real estate industry has witnessed a paradigm shift from traditional finance to an era of institutional funding while ushering in transparency, clarity and muting of arbitrariness.
Some of the major initiatives are:
1) Real Estate (Regulation and Development) Act, 2016: The Real Estate (Regulation and Development) Act, 2016 which came into force in March 2016 has laid down a regulatory framework which will change the way the real estate sector operates in India. It aims to enhance transparency, bring greater accountability in the realty sector and set disclosure norms to protect the interest of all stakeholders. Speedy execution of property disputes will also be ensured in due course.
2) Amendment to the Benami Transactions Act: The Benami Transactions (Prohibition) Amendment Act, 2016 lays down stringent rules and penalties associated with dealings related to ‘Benami’ transactions. It establishes a regulatory mechanism to deal with disputes arising from such transactions and levying penalties to increase the institution-investor participation and regulating the sector to make India an attractive investment destination.
3)100% deduction in profits for affordable housing construction: To promote affordable housing, the finance minister proposed 100% deduction in profits to an undertaking from a housing project for flats of up to 30 sq meters in four metro cities and 60 sq meters in other cities. These projects have to be approved during June 2016 to March 2019. Another condition was that the project should be completed within three years of grant of approval.
4) Interest subsidy for first-time home buyers: To stimulate housing demand from first- time home buyers, the Union Budget 2016-17 also proposed deduction of additional interest of Rs 50,000 per annum for first-time home buyers for loans of up to Rs 35 lakh sanctioned during the next financial year for houses with a value not exceeding Rs 50 lakh. This move should positively influence home sales in non-metros in the long term where residential product prices are not as high as those in metros.
5) Change in arbitration norms for construction companies: To help the ailing construction sector, the government has cleared reforms including speedier resolution of disputes and the release of 75% of amounts that are stuck in arbitration. The government will now release 75% of amounts against margin-free guarantee in cases where arbitral awards have been given but have been contested. The amount released will be used by contractors to complete projects or pay off debts. This is aimed at improving the cash flow position of large developers who have significant exposure in infrastructure and government contracts and eventually help in speedy execution of large infrastructure projects. Coming at a time when most developers are struggling with liquidity issues, this is a boon from an overall perspective.
6) Service tax exemption on construction of affordable housing: Exemption of service tax on construction of affordable houses of up to 60 square meter under any scheme of the Central or state government including public private participation or PPP schemes will propel construction in affordable segment across India and encourage greater collaboration between the public and private sector as well as participation in affordable home construction.
7) DDT exemption for SPVs to REITs: The Union Budget 2016-17 exempted any distribution made out of the income of the Special Purpose Vehicles (SPVs) to the Real Estate Investment Trusts (REIT) and Infrastructure Investment Trusts (InvIT) from the levy of Dividend Distribution Tax. This paved the way for the REIT model to become financially viable for retail investors.
8) Implementation of Goods and Services Tax structure: Goods and Services Tax (GST) is a positive move towards simplification of Indian tax system. However, the real estate industry is still awaiting clarity on which items fall into “sin” and “common use” and whether they will attract 18%, or 12% possible tax rates. Additional clarification is also needed if the implementation of GST will subsume existing service tax and Value Added Tax (VAT), which are levied for under construction projects currently.
9) Currency demonetization of 500 and 1,000 rupee notes: The recent demonetization of Rs 500 and Rs 1,000 rupee notes by the prime minister is perceived as a significant reform. In the long run, this measure along with Real Estate (Regulation and Development) Act, 2016 (RERA) will align the real estate sector to the international standards of doing business, resulting in more fund flow from institutional investors, banks and higher unit sales.
10) Permanent Residency Status for foreign investors: The Union Cabinet approved the grant of Permanent Residency Status (PRS) to foreign investors, subject to various conditions and with a provision for renewal for another 10 years. As PRS allows the holders’ spouse/dependents to take up employment in India, as well as the purchase of one residential property for end-use, the end user pool, mainly for high-end and luxury segment products stands increased which can promote the asset class in a big way.
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Your search leads to Greater Noida villas. Where connectivity reaches out, to bring the Capital and NCR closer. Greens bloom and Pollution stays away. A planned sub city of ample spaces that allows a life you choose. And then settle yourself in a luxury villa in Greater NOIDA.
Nestling here, at THE HEMISPHERE, choose a life embedded in haute living even as you ensconce yourself in the greens. Amongst all the villas in Greater NOIDA, it’s centrally located and well connected to offices, children’s education, dining, partying holes & entertainment hubs of Delhi-NCR by the Metro, Road and Air. The 100 acres golf residence villas project property offers a 9-hole golf course in its span. Amidst expanses of greenery. And an embedded green construction that allows you to revel & celebrate a sustainable life. All that you can think of in terms of facilities are at a short distance in this golf residence villas .And also something you wish – crème de la crème community – wedded to a golfing high-living!
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