Mumbai: As the Union Budget for FY2024-2025 approaches, real estate developers are rallying for a comprehensive set of measures aimed at bolstering the sector’s growth trajectory. Key among their demands are tax rationalisation, enhanced allocations for the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund, and sustained government support for affordable housing initiatives to stimulate demand.
Highlighting their priorities, representatives from the real estate sector, including the National Real Estate Development Council (NAREDCO), have called for an increase in the SWAMIH fund corpus by ₹50,000 crore in the upcoming budget. This move, they argue, is crucial to bolstering liquidity and supporting ongoing projects aimed at fulfilling the government’s ambitious ‘Housing for All’ mission. “The denial of input tax credit under GST for new projects has disrupted the sector’s supply chain, significantly inflating construction costs and adversely impacting cash flows,” noted a spokesperson from NAREDCO. The burden of these increased costs ultimately trickles down to end consumers, affecting affordability and market dynamics. In the interim budget earlier this year, Finance Minister Nirmala Sitharaman had announced plans to construct an additional 20 million homes over the next five years under the PMAY – Gramin initiative, underscoring the government’s commitment to ramping up housing infrastructure across rural India. Budgetary allocations for the Pradhan Mantri Awas Yojana (PMAY) were correspondingly increased to ₹80,671 crore for 2024-25, reflecting a continued emphasis on affordable housing.
Furthermore, developers are advocating for amendments to existing taxation policies, including the removal of the ₹2 lakh cap on interest deductions under Section 24 of the Income Tax Act, 1961, for housing loans. They also seek clarity on GST exemptions for land sales and construction activities, which currently pose challenges due to their complex treatment under GST laws. As stakeholders gear up for the budgetary announcements, industry voices stress the critical role of policy support in sustaining momentum within the real estate sector. By addressing these pressing concerns through targeted reforms and increased financial allocations, policymakers can pave the way for a more resilient and inclusive housing market landscape in India.
