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Diabetic supplies: Drawing blood

Are pharma companies who service diabetics making super profits?

Somehow, one expects...

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Modern Medicine: Healthcare vs medical care

“Come forth into the light of things, Let Nature be your teacher” — William Wordsworth

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Economy & Nation Exclusive
Budget 2012 fails to help realtors, customers

Budget 2012-13 has come as a disappointment to most people. Neither customers, nor real estate developers happy about the finance minister’s offerings

Jones Lang La Salle, a real estate broker, summed up the reaction of the realty sector as 'mixed', saying there is little to be excited about the Budget. "It is difficult to see the raising of the personal income tax exemption limit from Rs1.8 lakh to Rs2 lakh as anything more than tokenism. It is certainly not relevant for the aspiring Indian middle-class home buyer. The expected exemption limit of Rs3 lakh would have had some significance. That said, the 1% tax rebate for home loans of up to Rs.15 lakh on homes costing up to Rs. 25 lakh will prove beneficial for developers in this segment."

However, for a city like Mumbai where an average flats costs more than Rs1 crore, there is no relief for the buyer. Ganesh Vasudevan, business head of Indiaproperty.com opines that the Budget has more negatives than positives for the customer. "Construction cost will go up because service tax has been increased from 10% to 12%. And in the end, it will be passed on to the customer. Though RBI hasn't hiked interest rates; there is not much enabler for home loans. It will affect buyers adversely."

Mr Chitnis sees allowing External Commercial Borrowing (ECB) for affordable housing is "an excellent move". "It will ensure better capital availability for developers of low-cost housing. This sector is typified by low margins, and it becomes attractive only if developers are enabled to produce greater volumes. Better capital availability will help in timely project execution, which will result in higher volumes."

However, there are others who sound sceptical on the point of relaxation of ECBs for affordable housing projects. "Developers can borrow money in the name of affordable housing projects, and then use that money to speculate and hold up prices," said a sector commentator.

Proceeds from the sale of a residential property are exempted from capital gains tax if they are invested in equity or equipment of an SME. Mr Chitnis says, "It definitely provides home owners with more reinvestment options. Previously, the only route for exemption was purchase of another property or tax saving bonds. At the same time, this move could also result in a lowering of sales volumes on the secondary sale market."

Pankaj Kapoor, MD, Liases Foras, says that this move may help investors who buy and sell properties. "It will help investors who have not been able to sell their assets. Also, it may reduce the black money component in such deals." He agreed that construction costs will go up, and said that it will be more problematic for those projects which have already commenced. However, considering the scenario overall, he says that the property market will remain sluggish for the next two to three years.

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