The real estate sector in India is a torchbearer for the economy, which contributes 6-7 per cent to the gross domestic product (GDP).
The real estate sector in India is a torchbearer for the economy, which contributes 6-7 per cent to the gross domestic product (GDP) and is the second-largest employment producer after agriculture. The condition of this region is connected to about 220 sectors, so any change or effect on this area has many times more impact on that other sectors. The central government, state government and central bank are providing relief to promote demand and business sentiments through various policy measures.
Maharashtra government reduced stamp duty by 3% as an initiative towards direct incentives for the housing sector. Earlier, the stamp duty charge in Mumbai, Mumbai Metropolitan Region, Pune, Pimpri-Chinchwad and Nagpur was 5 per cent, while the rest was 6 per cent for Maharashtra. Along with the reduction in stamp duty, a 1 percent reduction in stamp duty announced earlier this year will help attract investment in the housing sector. If you calculate this, then the stamp duty rate has decreased by more than 66% since the beginning of the year.
Both developers and home buyers benefit
This is the second time in this year when the state government has taken such a step to give relief to home buyers. This was the most appropriate time for the Maharashtra government to cut stamp duty rates. We are in the middle of festive season and this step of the state government is beneficial for both developers and home buyers. As we are moving forward and the government is opening more and more sectors for regular business activities, this is expected to gain momentum for businesses.
The house is where the person feels safe, a recent survey has said that more people are preferring to buy the house rather than renting and their preference is getting more towards ready to move homes. The result of the study can be seen from the registration data, which has seen a steady increase for the last few months. Ready to move houses will now be in focus as home buyers will have to pay only 2 per cent stamp duty and there is no GST like under-construction housing unit. Apart from this, the state government’s move to promote central government housing announced a 1-year extension for the Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) and lending rates by the RBI to lower rates by two decades. But the step is complementary.
Will encourage people to buy houses
Stamp duty reduction is time-bound and the action should be taken immediately. The 2 per cent reduction in stamp duty is effective from September 1 to December 31, and from January 1, 2021 to March 31, 2021, it will be 3 percent. This planned step will encourage people to buy homes. The increase in sales, due to the drastic reduction in stamp duty, is expected to make up for the loss of revenue to the state government. Extension of CLSS Scheme for 1 year by Central Government, Declaration of Affordable Rental Housing Complex and granting Infrastructure Status to it by 4% by the State Government this year by 4% reduction in stamp duty and by 110 bps in repo rate by RBI. Measures like bringing have made an investment in real estate the best.
(Article: Manju Yagnik, Vice-Chairperson Nahar Group and Vice-President, Naredco, Maharashtra)