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The murky real estate sector is betting big on the Budget 2016. With a slew of reforms expected to be announced in the upcoming budget, here’s what the expectations of a home buyer are from the <keyword id="2730532" type="UNKNOWN" weightage="20" keywordseo="NaMo-government">NaMo government</keyword>’s Union Budget 2016! 
	 
	“The Union Budget is an eagerly-awaited annual event which Indians follow closely, as the decisions and allocations announced by the Finance Ministry have great pertinence to both individuals and industries. The real estate sector is sensitive to many of policies that are announced both for various industries and individuals. The realty sector is just emerging from a prolonged and painful slowdown, and is looking for all and any signs of light at the end of the tunnel. This fact makes Union Budget 2016 all the more critical, and the real estate industry has many expectations from it,” said Anuj Puri, chairman and country head of JLL India. 
	 
	Financial protection from project delays 
	 
	Home buyers are calling the shots in the real estate sector. And the innumerable delays and failure in deliveries of the projects, the confidence of the home buyers is really low. Thus, for the realty sector to grow, it is important for the stakeholders to win their confidence. And this can only be done, if the government introduces policies that offers protection to the investors. 
	 
	“The Union Budget should pay specific heed to this pressing need. On purchase into an under-construction property, buyers can only claim tax benefits of Rs. 2 lakh after possession if construction is completed within three years. The benefits reduce to Rs. 30,000 if the builder delays construction beyond this - and they pay higher interest. First-time home buyers purchasing properties for self-use additionally pay rent,” noted Puri. 
	 
	He suggested that the Union Budget should make tax provisions for a home buyer from the time he starts paying interest on <a href="http://www.businessinsider.in/Heres-what-the-experts-have-to-say-aboutRBIs-no-rate-cut-policy/articleshow/50836779.cms">housing loans</a>. “Instead of allowing home buyers tax benefits post-possession, the Union Budget should make a provision that allows these from the time they start paying interest on housing loans. This will ease their monetary burden considerably and make increase the velocity of home loan disbursements,” he noted. 
	 
	Raise the tax saving cap on housing loan and insurance premiums 
	 
	Buying a home is an expensive affair and needs large investments. Thus, it would be nice if the government increases the tax deduction limits on home loans and insurance premiums. While the current limit is of Rs 2 lakh, the government must remember that the prices of property in key markets is skyrocketing at a rapid pace! 
	 
	“Also, tax concessions on house insurance premiums could be introduced to encourage end users to insure their homes. Similarly, the tax exemption limit should be increased by about Rs 1 lakh and be auto-set to match inflationary trends in a financial year,” he added. 
	 
	Raise house rent deduction limit 
	 
	The startup community is growing fast and thus self-employed people too is growing rapidly. For those who are working in an organisation, the house rent allowance can go up with time. However, for self employed home buyers, the tax deduction limit is restricted up to a meager Rs 2,000 under Section 80GG. The Modi government can certainly work on increasing this limit.

Budget 2016: Here’s what a home buyer wants from the Modi government!

Prime Minister Narendra Modi led National Democratic Alliance government came into power with much fanfare on May 16, 2014. And within a year, the government claims to have passed as many as 46 bills in the Parliament in the past one year. However, the future of some of the key legislations of the <keyword id="2730532" type="UNKNOWN" weightage="20" keywordseo="NaMo-government">NaMo government</keyword> is still uncertain. BI India lists down five such bills that are still doubtful 

	<keyword id="87979" type="ORGANIZATION" weightage="20" keywordseo="Land-Bill">Land Bill</keyword>
 

	The land bill has created controversy for the NaMo government. The bill has been vehemently opposed by not just the opposition but also some of the allies of the present government as well. The bill has been submitted twice in the Parliament but was not passed due to strong opposition to some of the clauses in the Bill. It has now been referred to 20 member joint Parliamentary Panel, who will seek public opinion from every stakeholder involved.
 

	Labour Laws
 

	This one is a big shocker to the Modi government. The Modi government’s decision to allow companies, which hire up to 300 industrial labours, to hand them pink slips without an official sanction has not gone down well with the trade unions in the country. In fact, on Modi government’s first anniversary on May 26, 2015, trade unions will go on mass protests against the reforms announced in labour laws. These strikes are also in protest of the proposed land bill by the Modi government.
 

	Goods and Services Tax
 The Bill may have been passed in the Lok Sabha with two-third majority but it still needs to be cleared in Rajya Sabha as well as half of the states need to ratify it. However, we still need to watch out if the Bill gets the same response in the Upper House as BJP government lacks majority, which could be put the future of <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> in doubt. However, the government is hopeful of implementing the Bill in 2016. 

	<keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> in Multibrand Retail
 

	This was the trump card that BJP played on during the pre-election times and had got massive support from trade bodies across the country. However, the Modi government’s U-turn in the matter, is now being criticised by their own people. RSS affiliated Swadeshi Jagran Manch has criticized the government for continuing with Manmohan Singh’s government’s stance in the issue. They have also asked the government to scrap the entire policy.
 

	Provident Fund 
 

	The government reduced the tax levied on Provident Fund from 30% to 10% but it could not provide any clarity on how it would do. Also, the government connected Provident Fund with the issue of black money but has been unable to provide paper that could establish any relation between two the issues.

Modi government’s first anniversary; five bills that are still in
ambiguity

Freshers have a reason to rejoice. Recruiters expect campus hiring to pick up this year following a lean season in fresher hiring last year. 
	 “We are expecting companies to increase their <keyword id="110909" type="UNKNOWN" weightage="20" keywordseo="campus-recruitment">campus recruitment</keyword> activity this year over last year as the overall economic situation has improved,” said V Suresh, executive vice president and chief sales officer of Naukri.com. 
	 He explained that since the <keyword id="2730532" type="UNKNOWN" weightage="20" keywordseo="NaMo-government">NaMo government</keyword> has taken measures to boost the economy, the markets are expecting stalled as well as new projects to take off. According to India Skill Report 2015 by online skill assessment firm, Wheebox, campus hiring will go up by nearly 18% to 23% in FY 16. The report also suggested that there will be an overall increase of 23% in the hiring activity for 2015. 
	 
	In terms of the sectors, industry experts expected the banking and financial services industry (BFSI) sector to be one of the major recruiters for new entrants in the job market. 
	 
	“We expect the manufacturing sector to increase its activity as there have been some positive announcements made for the sector. We expect companies to invest in this sector, thus giving the much needed thrust to the projects, which in turn will push upthe recruitment activity in both manufacturing as well as BFSI sector,” explained Suresh. 
	 
	Apart from BFSI, traditional recruiters for fresher such as IT, ITes will also continue the trend. Recruiters also noted that eCommerce will also become one of the major employers for new entrants in the industry. 
	 
	“eCommerce is doing extremely well in the country and we see a lot of new companies in this sector. Hence, this one too will bet big on fresher,” added Suresh. 
	 
	Talking about domain wise hiring, India Skill report 2015 revealed that there will be a surge in hiring of diploma graduates. The industry also expected a small increase in the recruitment of engineers and ITI candidates in the market. However, the recruitment drive at the entry-level will be driven by general management graduates which will form about 60% of overall hiring numbers. 
	 
	“For sectors like core and consumer durable sectors, there does not seem to be any major change in the overall hiring mix, except that the core sector is planning to hire more management graduates. Considering that the sector is expecting a significant growth in the coming year, it makes absolute sense to have management graduates onboard who can help in managing this change,” stated the report. 
	 
	It should be noted that the as per market estimates, the hiring activity recorded a 10% increase in February 2015 over the corresponding month last year.

More freshers to be hired this year by India Inc.
Here’s why

The insurance sector that witnessed some major reforms under the <keyword id="2730532" type="UNKNOWN" weightage="20" keywordseo="NaMo-government">NaMo government</keyword> is keenly awaiting the Union Budget for the year 2015-16. In a huge relief to the industry players, the government raised the <keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> cap from 26% to 49%. With a decisive move such as this, the industry is hoping that the Centre will now announce policy reforms that will further attract investments in this staggering sector. 
	 “At various forums, Government of India has expressed its eagerness to boost the financial savings in the country and Insurance industry is one of the best placed to channelize long term financial savings,” said <keyword id="172230" type="PERSON" weightage="20" keywordseo="Deepak-Mittal">Deepak Mittal</keyword>, managing director and CEO of Edelweiss Tokio Life Insurance Company Limited. 
	 
	Promote pensions and annuity 
	 
	Often, while planning one’s retirement, pensions and annuities are a less preferred option among the many available security instruments. This is so because the current tax does not allow huge returns on the annuity offered by the insurance companies. According to Mittal, the government needs to make pensions and annuity a more attractive investment option by reforming the tax policy for these financial instruments. 
	 
	“One of the important customer needs which drives savings behaviour is Retirement planning. This becomes even more important in a country like India because of increasing life expectancy and inadequate social security measures. Insurance industry plays a very important role through pension and annuity products,” said Mittal. 
	 
	“The current tax laws adversely discriminate against pensions and annuities and thereby create a disincentive for retirement planning through these products. We expect that this long standing anomaly will be corrected and this will help customers in saving effectively for their retirement needs,” he added. 
	 
	Make tax deductions exclusive 
	 Insurance companies have always felt that they have been at a disadvantage because other financial securities such as People’s Provident Fund (PPF), mutual funds among others are provisioned for tax deductions under section 80C of the <keyword id="6370810" type="UNKNOWN" weightage="20" keywordseo="Income-Tax-Act">Income Tax Act</keyword>. Hence, this tax benefit makes insurance a less preferred security. 
	 
	Industry experts have demanded the government to make tax benefits under Section 80C exclusive for insurance products. “A large number of people exhaust most of this limit because of provident fund contribution. Thus, the amount invested in life insurance policies is quite less”, said a report by PolicyX, a policy comparison website. 
	 
	It further added, “This will ensure that people invest more in life insurance plans. This demand sounds good but at the same time, there is hardly any chance to introduce any such provisions during this budget”. 
	 
	Push for universal KYC and single de-mat account 
	 
	“Finance Minister Arun Jaitley in his maiden budget speech had announced the concept of Universal KYC and a single demat account across asset classes. This is a powerful idea and if implemented well will be a big ease to customers of financial products across BFSI sector. We look forward to further clarity and operationalization of this initiative,” noted Mittal. 
	 
	Revalue the sum assured to premium ratio 
	 
	It should be noted that the life insurance product become unattractive as the tax benefits offered on these policies are available only in cases where the sum assured to premium ratio is at least 10. “While this provision was made with the intention to increase the cover provided by life insurance companies, it also ends up making the policies unattractive for middle and higher age groups given that there is an exponential rise in the cost of mortality in later years. We look forward to some relaxation in these guidelines either in form of tax benefits linked to the tenure of the policy or lower multiples for higher age customers,” stated Mittal. 
	 
	Our view: 
	 
	Insurance is a key sector in the financial industry and measures need to be taken to boost the sector. While excluding mutual funds and other financial securities from tax deductions under Section 80C of IT Act is not feasible, the government must definitely look at making pensions and annuity more attractive by exempting them from taxes. 
	 
	Image: Indiatimes.com

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Budget 2016: Here’s what a home buyer wants from the Modi government!

Purba Das

Modi government’s first anniversary; five bills that are still in ambiguity

Purba Das

More freshers to be hired this year by India Inc. Here’s why

Purba Das

Budget 2015: Here’s why Govt needs to promote pension and annuity

Purba Das

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