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The budget has little to stimulate real estate demand.

The real estate sector, where weak demand led to unchanged sales in the 2019 calendar, expected a budget to boost demand, but not. "It was a big disappointment for the real estate sector, especially after high expectations before the budget was released," said Gulam Zia, managing director of real estate consultancy Knight Frank India. The government has cut income tax rates on income up to Rs 15 lakh, but only if the taxpayer has agreed to waive all exemptions. It is a move that is unlikely to stimulate demand as the exemption from interest and capital on home loans is a great incentive to borrow to buy a house.

"Apart from the affordable housing pressure and personal tax relief, there were no significant benefits to solving the current housing problem," said Anuj Puri, chairman of Anarock Property Consultants. "Increasing the Rs 2 lakh limit on home loan interest rates could have led to healthier demand for housing, particularly in the affordable and mid-range categories." And although the government has spoken of upgrading the NBFC sub-credit guarantee system to facilitate real estate lending, it could be insufficient. Project delays are the biggest impact of a money crisis.

However, experts welcome the proposal to extend tax vacation for profits that developers deserve. The government has also extended the Rs 1.5 lakh payment for interest on affordable home loans. The problem is: it is unlikely to spur demand that could pull the sector out of the current chaos.

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