In a poll conducted by media, around 47% of the respondents felt providing incentives like tax sops to real estate developers is not sufficient to uplift the sentiments in the real estate sector, while 43% say subsidies can surely make a difference for the sector.
Around 10% of respondents were not sure of the impact of government subsidies on real estate.
Finance minister Arun Jaitley had said recently that real estate industry must survive on market economy and subsidies should not be the essence of survival.
“Essence of your industry (real estate) cannot be that I can survive only on subsidies.” Jaitley had said.
Real estate sector has been carrying the twin burden of slow sales and rising inventory for the past couple of years now due to high interest rates and slow economic fundamentals.
This has led to rising demand from the real estate community to extend incentives for the sector for making the business viable for maximum participation.
The government’s recent move to open up the real estate sector by removing the foreign direct investment (FDI) restrictions is expected to help complete stalled projects and revitalize cash flows of developers.
The Reserve Bank of India (RBI) on its part also has reduced the repo rate by 125 basis points so far this year, however, banks have not been kind enough to transmit the entire benefit of the rate cut to the end consumers.