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Budget 2021 has assumed great importance as the Covid-19 pandemic turned the economy upside down, resulting in an unprecedented humanitarian and economic crisis. This year’s budget is being seen as a way forward to get the economy back on track.

The most important thing from an economic stand point is job creation. It is estimated that India needs to create 10 million jobs every year till 2030. Therefore, I personally feel that this year budget’s emphasis should be on healthcare and job creating sectors such as infrastructure and housing.

Housing is one of the most important sectors in terms of job creation both for the direct benefits it gives to housing as well as to the indirect jobs that it creates. Direct jobs are created for construction workers, masons, carpenters, plumbers, engineers and so on. Indirect jobs are related to industries like cement, steel, paint, power and many of the ancillary industries associated with housing. Real estate therefore plays a big noteworthy role in shaping the economy and its revival is crucial for GDP growth.

The credit linked subsidy scheme has been a major success since its launch in 2015. There is a need to extend PMAY benefits to more locations and extend the deadline for the middle income group till March 2022 like the extension which is provided in the EWS/LIG category.

Reduction in stamp in Maharashtra has led to significant increase in demand. Maharashtra has also reduced premiums charged on construction by 50% till December 31, 2021. This 50% waiver in premium is applicable to both ongoing and new projects. The reduction in premium will help soften prices and improve buyer’s interest. To keep the momentum going, other states need to provide some incentives to the real estate sector.

There is a need to promote the rental market in India. Currently, the set off and carry forward of losses from house property is restricted to Rs 2 lakh. The earlier law did not have such restrictions and hence the earlier law could be restored.

Currently for under construction properties homebuyers have to pay GST of 5% that are not part of the affordable housing segment and 1% for residential properties in the affordable housing segment. If the GST for under construction can be removed for limited period of time, it will go a long way in boosting the demand for under construction properties.

With aim to provide last mile funding to stalled housing projects, government had set up SWAMIH fund. There are numerous housing projects which require last mile funding. It is not practical for a single fund to resolve all the issues. Hence, it would be desirable to have more such funds.

Lenders are currently hesitant to lend to stressed projects since any fresh funding to the stressed project will be classified as a NPL on day one in the books of the new lender. To encourage lending to stressed projects, any secured fresh funding should be ring-fenced.

(The writer is Managing Director, HDFC Ltd. Views expressed are personal)