Budget disappoints with no roadmap for smart cities, housing for all

It was a positive incremental Budget focused heavily on boosting infrastructure investment, though it was disappointing in terms of any announcements or roadmap to help build smart cities and housing for all, as promised earlier.

While Finance Minister Arun Jaitley has done well by coming down heavily on black money transactions in real estate by proposing introduction of 'Benami Transaction Prohibition Bill', he has given a total short shrift to the real estate sector's crying demand for an 'industry status'. The industry status could have eased the flow of bank loans towards the sector already under a severe cash crunch. There was no clear roadmap on 'housing for all by 2022'. While the government proposes to build two crore dwelling units in rural areas and four crore in urban settlements, a little clarity on the outlay for undertaking this construction activity of mammoth scale should have also been included in the Budget speech.

However, the Budget announcement to usher in clarity on taxation treatment of REITs will bring some succour for real estate companies as they can look forward to another avenue of revenue generation through REIT listings. Further, investors in REITs will be able to spread their risks by investing in various REITs rather than pooling in their investment in one property at a time. A follow-up on the last year's Budget announcement on smart cities should have made in this Budget as well. A clear roadmap on the development of proposed 100 smart cities, which was keenly awaited by industry, has not found any mention in the Budget.

(The author is Global MD - Emerging Business, and MD, South Asia, Royal Institution of Chartered Surveyors)