Aiming to boost the affordable housing demand, Sitharaman proposed to extend the date of availing an additional Rs 1.5 lakh tax deduction on home loan interest by one more year, till March 2021. (Express Photo)

The Union Budget announced by Finance Minister Nirmala Sitharaman on Saturday failed to keep up with the aspirations of the real estate industry, which is facing a huge demand slowdown and sluggish housing sales.

Aiming to boost the affordable housing demand, Sitharaman proposed to extend the date of availing an additional Rs 1.5 lakh tax deduction on home loan interest by one more year, till March 2021. The additional deduction of Rs 1.5 lakh over and above Rs 2 lakh was introduced in the last year’s Budget. This was allowed for those buying homes for the first time and of up to Rs 45 lakh and made applicable for home loans sanctioned till March this year. The minister also announced that builders will get tax holiday on affordable housing projects approved till March 2021.

Niranjan Hiranandani, president of National Real Estate Development Council (NAREDCO), said: “While the Budget has set a positively tone, it failed to announce the much awaited economic stimulus for the country to grow into a $ 5 trillion economy. It also lacked incremental allocation with over-emphasis on fiscal prudence and inflation. With the economy in doldrums and acute slump in consumption, no efforts have been made to create demand.”

“Any fiscal measure, under which tax benefits would be extended to both the homebuyer and the developer in the affordable housing sector, would have provided a fillip to the sluggish sector…,” he added.

The president of Maharashtra Chamber of Housing Industry (MCHI-CREDAI), Nayan Shah, said that overall, the Budget did not inspire the real estate sector. “We welcome the government’s move to encourage infrastructure and boost economic development through commerce and investment to reach the target of $ 5 trillion economy. But we are not satisfied as the Budget lacks measures to boost the real estate sector.”

“Today, everybody knows that real estate is in deep crisis and the Budget has not made any provisions for the industry in terms of improving demand. It has also not taken any step to make purchasing homes an easy task… In such a scenario, it is very difficult to encourage people to buy homes in the affordable segment, especially in Mumbai and MMR,” he added.

“We wanted the finance minister to give a new direction for the revival of the real estate sector… it had not happened. Lakhs of people want to buy homes… a little push could have made a big difference,” Shah said.

Sanjay Chaturvedi, an advocate dealing with housing issues, however, described the Budget as a “good beginning for real estate sector”. “The finance minister has extended the date for tax holidays… She has also given credit guarantee schemes for stressed NBFCs (non-banking financial company).”