JULY 2009

This year’s budget estimates have belied all hopes of reality sector. The realty sector has undoubtedly suffered the global economic meltdown. The builders and reality captains are still feeling the pinch of financial losses which caused the abandonment of their projects and unable to initial any new ones. The market sentiments are so deep triggered by credit crunch and slump in demand, the reality sector’s hopes of some positive measure to be announced by the finance minister stood shattered down.

Actually the reality sector is the engine of economic growth in any country. At a time when the reality sector or construction activities in any given economy are facing the financial crunch and slump in demand, millions of jobs are laid off pushing the technical & non-technical hands off the road.

Although, the budget is being held as pro-infrastructure and aim to create mars housing particularly for rural-ites, yet fell short of providing any initiative for end ushers and urban housing. The real state sector is gasping under the debris of meltdown on global level, which it was expecting some stimulus from the government in the form of some tax exemption for this sector, which did not happen.

Whatever little that could be done, or still this issue can be reshaped that the realty sector needs to be integrated as a part of “infrastructure”. Much weigh-age is being to infrastructure and housing for poor people, realty sector can be injected into the system which has all the ingredients of building up affordable housing both in rural & urban India. This would facilitate for the developers to seek much needed finances from the banks.

We, in the realty sector is reading in between the lines. The Rs.1,00,000 crore by the Infrastructure Finance Company {IFCL} would be raised for the development of infrastructure including building housing for the poor. Indirectly the builders are likely to be involved in the construction of the housing. However, the realty sector still demand to provide it adequate liquidity lowering of bank interest on housing loan, adequate funding for in-hand projects, etc. This would enhance once again the market sentiments and would help ton create job opportunities necessary for the much needed economic growth in India to the tune of 9% as Prime Minister Manmohan Singh has set a target for GDP growth.

At last, finance minister, Parnab Mukherjee has announced I percent interest subsidy on loans up to Rs. 10 lakh taken for homes that have the price tag of Rs.20 lakh. This will certainly help the morass that the industry has been experiencing for sometime past.

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