By Vinod Behl (IANS)
Much on expected lines, though this year’s budget does not unveil any big bang measures to give a giant push to the beleaguered real estate. Yet, it aims to revitalise the economy, triggering investments through a series of reform measures. It also seeks to spur infrastructure and boost affordable housing, to provide a sigh of relief to the sector.
In the absence of any largesse and quick fix solutions, the budget may look disappointing, but it is perfectly in line with the government’s philosophy that real estate should grow on the strength of the economy and follow the path of long-term, sustained and inclusive growth.
As infrastructure holds the key to the growth of real estate, as expected, the budget made a record allocation of Rs.2.31 lakh crore for roads, highways and railways, besides focusing on green field ports and upgradation of unused and under utilized airports and air strips.
As the trigger to start the investment cycle has to come from public spending, the budget has rightly focused on spending on basic infrastructure construction through multi-pronged strategy of establishing a Rs.4,000 crore National Investment & infrastructure Fund, a dedicated LIC Fund to provide credit enhancement to infrastructure projects, revitalizing public-private partnership (PPP) mode of infrastructure development and revamping dispute resolution mechanism The focus on public capital expenditure, is expected to help crowd in private investment.
The budget is fully seized of the ground reality that while commercial office real estate is on recovery path, residential real estate is still under lot of stress. Therefore, it lays emphasis on strengthening housing sector in line with government’s mission of ‘Housing for All’. And since most of the housing shortage is in low cost housing, the budget rightly stresses on affordable housing.
To boost supply, the budget has incentivised private developers by making provision for 100 percent service tax exemption for affordable homes with sizes up to 30 sq metre in metros and 60 sq metre in non-metros. In order to encourage timely delivery of homes,the government has put a condition that developers can avail tax benefit only if they complete construction within three years.
On the demand side, the budget has provided additional rebate of Rs.50,000 per annum on housing loan interest for first time home buyers in affordable segment, with loans not exceeding Rs.35 lakh and property value not exceeding Rs.50 lakh (though it is on the lower side in metros to realize full potential).
The hike in the limit of deduction for rent paid under Section 80 GG of IT Act, will positively impact rental demand for affordable housing. The exemption of real estate investment trusts (REITs) from Dividend Distribution Tax (DDT) will also give a fillip to affordable housing.
Considering that rental housing can play an important role in the success of “Housing for All”, the budget has provided a much needed boost to it by hiking the HRA limit from Rs.24,000 to Rs.60,000 crore per annum for rented accommodation. Further, with government firmly sticking to 3.5 percent fiscal target, going forward, the budget will provide enough head room for reduction in interest rates for home loans to boost housing.
Already, in order to boost low cost housing, home loan takers are getting interest subsidy of 6.5 percent on loans up to Rs.6 lakh for economically weaker sections (EWS) through credit-linked subsidy component of “Housing for All”. And now in the budget, the lowering of corporate tax (for FY 18) for companies with below Rs 5.crore turnover, will boost housing finance companies focusing on lower income groups (LIG) and EWS segments.
The budget has also addressed the important issue of bringing home prices within the reach of masses. Though the government has not hiked the IT limit, yet hike in HRA limit and provision of standard deduction of Rs.24,000 p.a for those not availing HRA, will push up disposable income to enhance affordability.
The service tax exemption to developers undertaking affordable housing, will help cut down the housing cost. The extension of excise tax waiver from Concrete Mix to Ready Mix Concrete, will also reduce cost. The abolition of DDT for REITs will help access cheaper funding, thereby resulting in cost reduction.
All these measures will provide a fillip to housing, particularly affordable housing. The corporate real estate, on the other hand, will get benefited with the announcement extending sunset date for exemption of fiscal incentives to SEZs to March 2020. The commercial office sector will further get propelled with boost to REITs.
Since liquidity crunch has been the biggest bane of real estate sector, it was expected that the budget will address this crucial issue. But in view of the poor health of banks, it was not justified to accord industry status to real estate to access cheap bank funding. However, with government taking effective measures on reviving ailing banks like allocation of Rs.25,000 crore for recapitalisation of public sector banks, one can expect inflow of bank capital to developers in the times to come.
But by making REITs attractive for investors, the budget provides opportunity to fund-starved developers to raise capital. The service tax exemption to affordable homes will improve viability of such projects, making it easier for developers to attract private domestic and foreign investment. The decision to deepen corporate bond market will prove to be a shot in the arm of private developers.
With this year’s budget, the government carries forward its reform process to boost realty, that started with liberalising FDI norms to boost affordable housing, allocating huge funds for urban infrastructure projects, reviving SEZs and bringing housing for economically weaker sections and slum redevelopment under CSR to provide impetus to low cost housing.
The provision made in this year’s budget for digitization of land records will improve transparency, thereby boosting the confidence of property buyers and investors. This will also expedite the process of land acquisition, thereby checking delivery delays and cost escalation.
The announcement to set up 300 “Rubran” clusters, is another positive reform to boost realty. The budget has, however, partially addressed the issue of introducing single-window system to check long delays in project approval due to multiple authorities by bringing amendments to the Companies Act, 2013, and revamping existing procedures and processes through tech intervention.
The government is quite serious and focused on getting two crucial reform bills of Real Estate Regulation and Development Bill and GST bill (currently stuck in parliament) passed, in order to introduce single, uniform tax regime and empower property consumers and investors by providing a fair deal by setting up regulatory authority.
In sum, it is a positive budget that is set to boost the sentiment of the real estate sector. Though the sector reeling under a slowdown, had hoped for much more relief, yet, there is enough on the platter to induce home buyers and developers, taking real estate forward on road to revival and sustained growth.
Joint statement from the Greater Toronto Area & Hamilton Mayors and Chairs
We are united in fighting COVID-19 – protecting our residents and saving lives.
While the measures we have taken to stop the spread of the virus have made a difference, this virus has still taken far too many lives in our communities and continues to threaten the lives of our residents.
At the same time, there is no denying the devastating impact of COVID-19 on the economy. Jobs have been lost, many businesses have closed or are at risk of closure, and many families are worried about their financial future.
We’ve been hit hard but that’s why it is so important that we keep moving forward and come back as strong as possible.
Today, the GTHA Mayors and Chairs met to discuss the impacts of COVID-19 on the region and how our municipalities can work together on the economic restart and recovery.
We know the Toronto Census Metropolitan Area alone is projected to lose 355,000 jobs and 28% of GDP along with $894 million in lost wages and $3.7 billion in revenue losses for businesses. This will be felt right across the GTHA but it also threatens the provincial and national economies.
A strong recovery right here in the GTHA is crucial to healing the economic damage done by COVID-19 and helping the families and businesses all governments have been working to protect throughout this emergency.
Ontario’s economy and Canada’s economy need the GTHA to come back stronger than ever when the restart begins.
We are determined to deliver this recovery and we agreed today that the GTHA municipalities will be working together to successfully and smoothly reopen our vital regional economy when the time comes.
We also discussed how we can in a consistent way achieve significant, necessary financial support from the other governments to help mitigate the impact of COVID-19 and protect our ability to contribute to the recovery. A strong recovery needs strong cities and regional governments.
We have agreed we will work together to share information about our respective financial positions and explore together measures we can advocate to the other governments which will help to ensure the financial stability of local and regional governments in the GTHA.
Our child care and recreation programs help parents get back to work.
Our emergency services keep people safe.
Our transit systems get people to work and home safely.
Our major infrastructure projects – often built in conjunction with the other governments – will help kick-start the recovery and create countless jobs.
Our economic development activities attract jobs and investment.
We built a strong and vibrant GTHA and we know that we will need to come back even stronger and as quickly as we can in order to keep Canada’s economy going.
With the cooperation and support of the provincial and federal governments, we are ready to rise to this challenge.”
Four People Charged in Mississauga Pedestrian Fail to Remain Fatality
Investigators from the Major Collision Bureau have charged four people in Mississauga’s most recent fatal fail to remain collision.
On Thursday, February 15, 2018, at approximately 8:40 p.m., the victim, a 61 year-old female from Mississauga, was struck by a south bound vehicle as she was crossing Mavis Road in the area of Knotty Pine Grove in the City of Mississauga. The vehicle did not remain and the victim, having suffered major injuries, was pronounced dead at the scene.
On Saturday, February 17, 2018 shortly before 7:00 p.m., Satchithanantha VAITHILINGAM, a 60 year-old male from Brampton, and the driver believed to be responsible in this incident, surrendered to police at 22 Division. Satchithanantha VAITHILINGAM has since been charged with Fail to Remain Cause Death.
Hivissa SATCHITHANANTHAN, a 25 year old female from Brampton, Shajeetha SATCHITHANANTHAN a 28 year-old female from Brampton and Gowtham SATKUNARAJAH a 28 year-old male from Brampton have each been charged with Accessory After the Fact in relation to this incident.
Satchithanantha VAITHILINGAM will answer to his charge on March 12, 2018. Hivissa SATCHITHANANTHAN, Shajeetha SATCHITHANANTHAN andGowtham SATKUNARAJAH will answer to their charges on Monday March 26, 2018 at the Ontario Court of Justice in Brampton
Anyone who may have witnessed the collision, have dashboard video footage of the incident or who may have any information regarding this incident is asked to contact investigators with the Major Collision Bureau at (905) 453-2121, ext. 3710. Information may also be left anonymously by calling Peel Crime Stoppers at 1-800-222-TIPS (8477), or by visiting www.peelcrimestoppers.ca or by sending a text message to CRIMES (274637) with the word ‘PEEL’ and then your tip.
Justin Trudeau in India: Hug missing! Mounting pressure?
The much publicized and anticipated visit of Prime Minister Justin Trudeau to India was marred with questions. The questions were centered on the kind of welcome he would be given in the Sikh dominated state of Punjab. Also the famous hug by Indian Prime Minister Narendra Modi was being anticipated. Prime Minister Justin Trudeau finally made his much-touted visit to India. He landed on the Indira Gandhi Airport, New Delhi only to be received by Gajendra Singh Shekhawat not even a Cabinet Minister in Narendra Modi’s government.
He is presently the second rank Minister of State for Agriculture. That comes in complete contrast to the warmth that Prime Minister Narendra Modi and his NDA government has generally displayed towards the visiting dignitaries. Only a couple of weeks ago, when the heads of the 10 ASEAN states arrived in India, Prime Minister Narendra Modi didn’t receive Prime Minister Justin Trudeau at the airport, as he has previously done with many leaders including Barack Obama, Xi Jinping, Shinzo Abe, and Benjamin Netanyahu.
The fact that Prime Minister Narendra Modi didn’t join him is all surprising even when Prime Minister Trudeau visited Gujarat. This is unusual because the Indian Prime Minister has set a trend that he always accompanies head of the state when they visit his home state.
Even Chief Minister of Uttar Pradesh Yogi Adityanath did not show up, let alone accompany Prime Minister Trudeau to the Taj. However, during Israeli Prime Minister Netanyahu’s 15 January visit to the Taj Mahal at Agra, Yogi Adityanath had received Netanyahu and his wife and shown them around as well as hosted a lunch for them. For first three days, none from the executive or the elected representative held any meeting with the delegation.
Media in India is trying to spread a message that the cold treatment given by Prime Minister could be because two of the four Sikh members of Trudeau’s cabinet – Harjit Sajjan and Amarjeet Sohi – support the Khalistan movement. However, had that been the case his visit to Punjab would have got a similar response. However, the Punjab Government led by Captain Amarinder Singh rolled out a red carpet during his stay at Amritsar and even the two leaders held some fruitful discussions.
Thus putting an end to those criticisms that that Prime Minister Trudeau’s visit was devoid of any warmth. Chief Minister of Punjab Amarinder Singh, for instance who met Prime Minister Justin Trudeau setting aside his earlier prejudice that he exhibited during the visit of Defence Minister Harjeet Singh Sajjan.
In recent months, Gurudwaras (Sikh temples) in Canada, the United States and Australia have banned Indian officials from visiting gurudwaras and the moment started with Gurudwaras here in Toronto. Could that be the reason for Prime Minister Narendra Modi to not accord one of the warmest welcomes that he is known to provide? Or the use by Canada’s parliament of the term genocide to describe mass killings of Sikhs in India in 1984 has left the Indian Prime Minister disturbed? However, more than Prime Minister Modi, this could have left the Congress party in troubled waters, but that was also not the case as Amarinder Singh hails from the same party.
The lukewarm welcome to Prime Minister Trudeau can have its political ramifications too. Will it hamper the significant 2015 deal, in which Canada agreed to supply 3,000 metric tons of Uranium to power India’s atomic reactors?
Somewhere Prime Minister Modi has not taken the issue of non allowing entry of Indian officials to Gurudwaras and the statement on Genocide too lightly. Prime Minister Modi however has failed to understand that Canada cannot curtail the right of freedom of speech and expression of its citizen.
Two nations perhaps failed to resolve the matter before Prime Minister boarded the flight from Canada and not welcoming Prime Minister Trudeau could be a tactical decision to put pressure on him. With Prime Minister Modi preferring to meet him at the far end of the tour has conveyed a lot about the myopic approach of Prime Minister Modi.
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