Real estate sector is an important pillar for the economic growth and stability of the country. It is the second largest employment provider and also supports various sub-sectors, such as steel, cement, infrastructure. Consequently, the government has undoubtedly taken measures to incentivise the sector. However, owing to the ever-changing landscape, the sector faces many challenges, such as lack of liquidity, delay in projects, unstable demand among others.
To add to the issues, COVID-19 related lockdown led to an unprecedented era for real estate sector. Apart from the policy initiatives, the industry expects that the upcoming Union Budget 2021 will address direct tax challenges to alleviate the stress surrounding the sector.
Granting the status of ‘infrastructure’ to the real estate sector has been an age-old ask of the industry. While the government has accorded the said status to affordable housing, expanding to all categories of assets in real estate will be welcomed. This will attract investments from large pockets of sovereign wealth funds /pension funds who have been granted tax exemption on income streams from ‘infrastructure’ investments.
With the land prices skyrocketing, Joint Development Agreements (‘JDAs’) have become a