Investors’ Eyes Big On Budget 2012-13

Union Budget is one of the exigent annual cost-effective occurrences in India. Almost every sector and various com panies are directly or indirectly depend on budget for their investment and other policy decisions. Same like every year, this year also the corporate sector expected a lot but the Budget 2012-13 illustrated independent reality.

This year budget has not taken significant implements to rise-up real estate industry. The budget 2012-13 drew mixed effects.The affirmative announcements were made in sectors like power, infrastructure, agriculture and aviation while the hike of excise and service tax disappointed the entrepreneurs.

Real Estate contributes huge percentage in GDP growth. Any improvement in this sector would help to boost GDP growth. But the Union Budget has done very little to strengthen real estate industry. The increased burden of 2% service tax and excise duty may decrease the demand of property.

The increase in excise and service tax has negatively impacted on enterprisers a lot, also its consequence may raise inflation rate. The budget offered almost no relief on home loan rates, cost of construction materials, project funding and taxes except for the ECB approval for ‘Affordable Housing.

The Government also has tried to focus on affordable housing by allowing External Commercial Borrowing (ECB) for low-cost housing and extending the interest subvention for one more year for loans up to Rs. 15 lakh on property costing up to 25 lakh.

The extension of the one percent interest subvention scheme for low cost housing is a great turn for this sector. This makes it possible for developers to get funds at a lower cost. In order to ease liquidity, the government has also reduced withholding tax on ECBs for affordable housing from 20% to 5% for 3 years.

Property in noida depends on the overall expansion of the area development. To expand Noida, greater Noida and the Yamuna expressway the UP Government has brought-up with newer projects. Also the UP state Government has approved some development plan of Noida extension and forwarded it to the NCR planning board. The sale of plots for industries and corporate by the Yamuna Expressway Industrial Development authority (YEIDA) is on huge success. Although the value is already much higher, it is believe that this region will soon overtake the development in other NCR area. Noida and Greater Noida have world-class infrastructure, which will help the country in attracting foreign investments. Noida real estate development has been done in a planned manner.