Anuj Puri, chairman at the Indian unit of Jones Lang LaSalle Inc. comments on India’s budget.
India will cut the budget deficit to 4.6 percent of its gross domestic product in the fiscal year ending in March 2012, Finance Minister Pranab Mukherjee said in his annual budget speech in parliament today. India will extend an interest rate subsidy on housing loans, Mukherjee said.
“It would seem that the budget pointedly ignored the larger issues affecting the Indian real estate sector at this sensitive stage of revival and growth.
‘‘Special economic zones have been brought under the purview of minimum alternate tax, which basically diminishes the benefits that such zones offer for developers over other commercial real estate asset classes.
‘‘Raising the priority home loan limit from 2 million rupees ($44,000) to 2.5 million rupees is good news for the low income group segment, but will do nothing to ease the pain in the metropolitan cities, where real estate prices and therefore demand for affordable housing is highest. Companies such as Unitech Ltd. and Ansal Properties & Infrastructure Ltd., which are rolling out budget housing, will be benefited by increase in volumes.
‘‘The 1 percent interest subvention for home loans up to 1.5 million rupees from the previous limit of 1 million rupees will come as a relief to home loan borrowers from the low income group segment.’’
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