Kishor Pate, CMD – Amit Enterprises Housing Ltd.
The upcoming Union Budget will address the nation’s overall financial concerns, within the framework of powers vested in the Finance Ministry.
It is eagerly anticipated every year, since it announces policy changes which have a direct or indirect bearing on the economy, the industries that drive the economy and – not least of all – the common man.
These policies are formulated on the basis of a national perspective. In other words, they may not have same relevance in various States, since States have their own policy mechanisms.
It therefore makes little sense to expect the Union Budget to take into consideration the requirements of individual cities. Nevertheless, the broader policy changes (or lack of changes) do have a bearing on the economic situation within each city.
As such, Pune certainly does have expectations from the Union Budget 2013-’14. As an industrial powerhouse that generated enormous revenue for the Government and countless jobs for its citizens, Pune will be directly affected by the financial policy decisions that the Budget brings forth.
And one of Pune’s most dynamic industries, which provides livelihoods and also caters to the housing requirements of lakhs of people across all income segments, is real estate. Therefore, the city’s real estate market looks forward to positive policy announcements that will benefit it as an industry and also its many stakeholders.
On a macro level, it is expedient that the Union Budget rationalizes the existing home loan interest rates so that more Indians can begin to realize their deferred plans of home ownership.
Interest rates play a crucial role for many segments of this country’s society and are a key consideration for the LIG segment. The Budget should also reduce the income tax burden on the common man so that there is greater ability in and incentive for investing in self-owned homes.
The Budget should also introduce measures to increase FDI inflows into the country, and broaden the scope of external commercial borrowings so that more low-income housing can be created.
Pune is eminently placed for budget housing, thanks to its lower land prices, the availability of sufficient land parcels for low-cost housing and also developers who are still willing and able to cater to the affordable housing segment.
More foreign investment into the city’s real estate sector, both in terms of commercial spaces to generate more jobs and more housing, is a very real need.
Similarly, a more significant allocation for infrastructure development coupled with stricter guidelines on implementation of infrastructure projects would make a huge difference for Pune’s real estate market.
The increasing deficit of cohesive and comprehensive infrastructure is becoming a bigger problem for Pune with every passing year.
For that reason, we also expect that the Union Budget takes decisive steps to remove the bureaucratic hurdles to implementation of pending or deferred infrastructure undertakings.
The city needs to grow outward, and this is only possible if the emerging areas receive road connectivity as well as basic facilities such as electricity and water supply.
Finally, Pune’s developers look forward to an easing of funding for new projects. More project completions mean more competitiveness on the market, and competitiveness is what keeps prices in check. It is axiomatic that when supply becomes scarce, real estate prices rise.
Will Union Budget 2013-’14 deliver on some – if not all of these points? Will it give Pune’s real estate market reason to cheer? As always, the city waits with bated breath for some positive signals this year.
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