Pradeep Jain thanks FM for giving due importance to real estate sector
By ANIMonday, February 28, 2011
NEW DELHI - Commenting on the Union Budget 2011-12, Pradeep Jain, Chairman, Parsvnath Developers Limited on Monday thanked Union Finance Minister Pranab Mukherjee for giving due importance to the second largest employment generating sector of Indian Economy - real estate sector.
He said the market has welcomed the reduction of fiscal deficit target. For the real estate sector and infra sector, there are at least six major influencers:
1.Priority home loan limit increased to Rs 25 lakh from Rs 20 lakh
This will certainly help the Lower Income Group of buyers who plan to buy a home through bank loans. As in last budget it was directed that every bank has to maintain 20 per cent of its loans to this priority section, this is definitely a boost for the sector as it will increase demand.
2. Interest subvention of 1 per cent on housing loans raised to Rs 15 lakh with cost of house upto Rs 20 lakh Interest subvention is basically an interest subsidy given by the government on loans. Here, a subsidy of 1 per cent on loan upto Rs 15 lakh on a housing costing not more than Rs 25 lakh is definitely a giant leap so as to boost the demand for affordable housing.
3.Allocation of Rs 58,000 crore to Bharat Nirman projects and proposal to set up Mortage Risk Guarantee fund for rural housing. This is a very good move by the union government towards rural development of our country. As the project also includes development of rural housing, this allocation is going to help the developers in developing quality housing projects in rural parts of India.
4.Creation of an Infrastructure Debt Fund to boost infrastructure funding and to increase Infrastructure spending by 23 per cent. It has become a very tough task to get loan from banks for the infrastructure projects. Also, after the latest scams, banks are now reluctant to lend to this sector. This Infrastructure Debt Fund will certainly ease the entire procedure and will help us in securing regular inflow of fund for our ongoing and new projects.
5. Plan to allow FII limit in infrastructure bonds up to 25 billion dollars.
He said for the entire infrastructure sector, he thinks this is the most important step taken by the finance minister.
“This will solve the funding problem of the entire sector up to a great extent,” he added. (ANI)
