Union Budget falls short to expectations

The Union Budget for 2012-2013 presented by Union Finance Minister Mr Pranab Mukherjee in Lok Sabha on March 16 has failed to live up to the expectations of the real estate sector. Already reeling under a huge credit crunch, the industry players were hoping for a strong regulatory and effective policy framework which would have helped in boosting the real estate sector, but the Union Budget 2012 falls short of expectations.

Experts are of the view that the real estate sector may get some respite from an otherwise stagnant growth pattern with an increase in liquidity through availability of External Commercial Borrowings (ECB) and availability of higher deduction for affordable housing.
The developers in the real estate sector, which is facing severe credit crunch due to higher interest rates, expected the government to relax norms for repatriation of FDI and external commercial borrowings (ECBs) in the Budget for 2012-13. The industry expects the Budget, to be announced on March 16, to relax norms for FDI and ECBs, especially for township projects that will give developers source funds at a much reasonable cost. The Budget has allowed ECBs in the affordable housing sector. Barring this, real estate experts feel, the Union Budget for 2012-2013 presented by the Finance Minister, has nothing to cheer about as far as the real estate sector is concerned.