The Telangana Developers Association (TDA) has asked the union finance minister Nirmala Sitharaman to come to the rescue of middle class by proposing measures in the upcoming union budget 2023-2024 by taking measures like revising the income slab for middle class, increase housing interest subsidy in income tax, reduce the bank interest for below Rs 60 lakh housing loans by 2% and also GST slab cuts on the items required for middle class.
In a statement, TDA president GV Rao on Saturday said high incidence of taxation on building materials such as steel, cement, transportation and diesel and sudden spurt in land prices and high labour cost (food inflation) have already forced a hike in the prices of middle class housing. The problem is compounded with colossal loss of employment in Covid 19 lockdowns, low or no growth in salaries and food inflation together with increased expenditure on health and education.
As a corollary, the realty sector, which contributes over 10% to Indian GDP, has taken a severe beating in general and specifically, realtors engaged in serving the middle class housing segment are stuck in financial quagmire created by low demand, high cost of land, building materials and labour and high lending rates.
“While realty sector welcomed GST with enthusiasm from the all India market, hopes were belied on account of the factors narrated above. The need of the hour is to create a financial ecosystem where the middle class, realtor and the country (govt. revenues) sustainably grow together,” GV Rao said.
In view of the above and specifically considering future of Indian realty sector, which has a pivotal role to play in India rising as a global power, the following policy decisions may be taken such as reduction of interest rate on middle class housing by 2% , at least in cases of loans up to Rs. 60 lakhs and incidence of GST may be rationalized and reduced, enhancing threshold limit of 5% income tax to Rs.10 lakhs and increase Income tax waiver on interest component on housing loans.
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