Stick To The Task
Industry expects continuation of broad policy frameworks and government's continued focus on capital expenditure and infrastructure development
India is now recognised as a globally attractive destination and is poised to become the third-largest economy. We are confident the nation will achieve enhanced economic progress and sustainable development under the new government.
We expect the continuation of broad policy frameworks and the government's continued focus on capital expenditure and infrastructure development. 2023 was a remarkable year for the Indian real estate sector, exceeding expectations and achieving record growth. This momentum is expected to carry over into 2024, driven by strong residential demand, a robust economy, and continued investor confidence.
To maintain this momentum, the government must provide some policy push. The government must consider tax rationalisation for construction raw materials, as this will significantly impact the industry. The definition of affordable housing needs to be revisited to boost the housing segment further. Given the substantial changes in construction costs, including raw materials, labour, and overall development, it is necessary to reassess the price, size, and income criteria to ensure the programmeremains inclusive and effective.
The government set a ceiling of Rs 10 crore for the long-term capital gain tax deduction for reinvestment in residential properties. The same limit has been set for the Capital Gains Account Scheme. Earlier, there was no maximum limit set on the account. We recommend that this limit be removed as it can be a big deterrent for HNI's/big-ticket residential reinvestments.
As the proportion of the interest payment is higher in the initial years of the loan tenure, we urge the government to raise this limit to at least Rs 5 lakh per annum. It should be noted that the exemption limits provided under Section 80 C and Section 24 B of the I-T Act have remained stagnant for a long time and have not been indexed to inflation. The government can also introduce tax incentives under Section 80C for real estate investment trust (REIT) investors. This would enable REITs to emerge as an attractive tax-saving instrument, further encouraging prospective investors.
Industrial and Logistics
The government has exempted the integrated GST of 5 per cent on ocean freight imports, the integrated GST of 5 per cent on international outbound ocean freight and 18 per cent on outbound air freight persists. Implementing zero rating of GST for all international transportation services would facilitate trade, align India with international tax practices, and reduce logistics costs. Additionally, the government should create a roadmap for sustainable growth in the logistics sector and incentivise logistics players to adopt sustainable practices such as allocating incentives for LEED-certified warehouses and reducing tax for green fleets in the supply chain.
Land
Unlocking government land parcels and partnering with credible private developers to develop affordable housing, industrial parks, and related infrastructure can significantly reduce development risk and leverage the private sector’s operational efficiencies.
With the goal of achieving "Viksit Bharat" – becoming a developed nation by 2047 – the government actively pursued fiscal consolidation, social empowerment initiatives, and green growth strategies. We expect government areas will remain focused around sustained infrastructure spending, clean energy and EVs, rural and middle-class housing, expansion of medical colleges and medical facilities, and promoting foreign investments.
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