On his Budget wish-list for the real estate sector, MD of Tata Housing, Brotin Banerjee said the government needed to hike the income tax exemption on home loans. “The second is reduction in stamp duty and other registration fees, which should be looked at across affordable housing to low-cost housing,” he said. “The third is; give reassurance to the market to look at a kind of real estate regulator that needs to come into the market to ensure fair play and transparency.”
Here is a verbatim transcript of the exclusive interview with Brotin Banerjee on CNBC-TV18.
Q: What are you expecting from the Budget? Do you think that in all fairness, a government, which is already having its back to the wall in terms of fiscal deficit, will be in a position to grant this higher exemption limit for interest from housing loans?
A: If there is a renewed demand for housing, it will be good for the economy. The hiking of income tax exemption on house loans should be enhanced to about Rs 2.5 lakh. The government is starting to focus on low-cost housing but there is a huge number of middle-class Indians, which is out of the market. They will look at the market with renewed interest provided the government takes into account two or three things. One is hiking the income tax exemption. The second is reduction in stamp duty and other registration fees, which should be looked at across affordable housing to low-cost housing. The third is: give reassurance to the market to look at a kind of real estate regulator that needs to come into the market to ensure fair play and transparency.
The market is in a bad state not only because there is a liquidity crunch but it is also lack of confidence among developers many of who have stopped working on projects. People are putting their hard-earned money and they won’t see any progress—the possession dates will be delayed. Thus, a combination of various factors need to be put in place by the government—some on new polices and some on exemptions, to really kick start the housing sector.
Q: How do you see prices headed from hereon—you have to make an assumption that the Budget maintains statuesque—in that case, do you think that house prices have stabilised or do you see in areas you operate and I assume you operate in Mumbai largely, do you see prices still tapering off?
A: Different markets are reacting differently but yes, prices have gone down. The Indian entrepreneur is highly entrepreneurial and as a result of which because of the tapering down of demand in premium end, many people are now coming up with affordable and low-income housing.
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