Budget an unbiased activity to sustain economical growth: Marathon Group

Chetan Shah, vice chairman, Marathon Group commenting on Union Budget 2010 said, “The union budget for FY11 is an unbiased activity to sustain the economical growth along with fiscal consolidation. For real estate sector, one of the beneficial proposals is that government has increased the tenure on scheme of 1% interest subvention on housing loan up to Rs 1 million, where the cost of the house does not exceed Rs 2 million up to Mar. 31, 2011.“

“Increased allocation to rural housing to 100 billion under Indira Awas Yojana will help more than 20 lac rural houses. For the first time, urban housing allocation has been increased to more 12.7 billion which is eight times the previous year of 1.5 billion shows that govt is taking some steps in right direction. On the contentious issue like tax holiday for housing projects (under Section 80-IB(10)), finance minister stated in his speech that duration is increased to five years from four years to complete the project and that benefit will be given for shop and commercial establishment limits,“ he added.

“However, details need to be seen on this. On negative side, finance minister left issues unaddressed on forward momentum to Real Estate Mutual Funds Real Estate Investment Trust to gather much needed funding for housing stock creation, an upward revision to tax exemption on housing loan interest payment (under section 24(b) of I-T Act) and forcing states on rationalization of stamp duty registration charges under JNURM. The finance minister in the finance bill has included a proposal to apply service tax to the under-construction real estate and this would certainly increase the construction cost,“ he said.