The Union Budget presented by Finance Minister Pranab Mukherjee failed to fulfill the aspirations of the moribund sector. The real estate sector is already reeling under huge credit crunch and it hoped to get some relief from the Finance Minister. Real estate experts feel that apart from allowing External Commercial Borrowings (ECBs) for the affordable housing sector, which will allow the real estate developers to raise funds from overseas markets at lower interest rates, the Budget doesn’t provide for any substantial measures that can boost the sector. However, even this measure is not expected to boost the sector in a big way. Samir Jasuja, founder and CEO, PropEquity, is of the view that “However, the ECB nod just for low cost housing projects would not help the realty sector in a big way, as most of the existing projects would be outside the ambit of this announcement.
Mukherjee’s move to exempt proceeds from the sale of residential property from capital gains tax, if invested in equity or equipment of an SME, have been welcomed by experts.
However, some experts feel that although the measure gives the home buyer more reinvestment options, it could result it cash flowing out from real estate.
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