Before the Union Finance Minister Mr Pranab Mukherjee presented the Union Budget for 2012-2013, his third as the Finance Minister, the real estate sector had high expectations from the Union Minister. Known as ‘Dr Fix it’ for his agile strategy on many fronts, experts thought he wouldn’t let the sector down already reeling under acute credit crunch due to higher interest regime. However, when on March 16, the Union Minister tabled his financial document in Lok Sabha, the real estate experts felt highly let down. The measures taken by the finance minister have dampened their spirits. A top representative of Century Real Estate said, “There is very little in the budget this year for the real estate industry. Other than allowing for External Commercial Borrowing (ECB) in affordable housing, there is nothing that the budget has to offer for the sector.”
However the Minister announced some sops towards affordable projects. Allowing ECBs in the affordable housing projects will go a long way in boosting this segment of the real estate sector where mostly middle class people spend their life-long savings. By allowing ECBs for low cost housing, availability of capital in the sector has eased. This will enable developers to raise funds from overseas at substantially lower interest rates, while also ensure timely completion as well as delivery of such projects.
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