Given the industry scenario, there were naturally several expectations from the Budget. The provisions expected for the real estate and infrastructure sectors have remained on the wish-list rather than becoming reality in a diminishing market.

The Budget is not the only avenue for the FM to introduce the measures required to prop up demand in the housing sector. In that sense, we remain optimistic. But the expected measures came short even in the large and crucial affordable housing segment.

Key measures announced in the Budget:

• Focus on rural housing and housing for urban poor – measures include increased allocation for Jawaharlal Nehru National Urban Renewal Mission to Rs. 128.9   billion, enhanced allocation for housing and provision for basic amenities to the urban poor to Rs. 39.7 billion (includes Rajiv Awaas Yojana, a new scheme aimed to make the country slum-free in the five year period), allocation under Indira Awaas Yojana increased by 63% to Rs. 88 billion and further allocation of Rs. 20 billion for rural housing fund. If these are not merely populist announcements but a sustained and synchronized effort is made towards this urgent end, this government will establish itself as one that believes in and practices inclusive growth. Meanwhile, they should be more realistic in the definition of affordable housing and housing for poor where parameters of plot size, floor area and cost of construction are concerned. Tax savings and incentives for developers that are equipped to service this enormous segment should also be taken seriously as only collaborative effort will see this ambitious plan bear fruit.
• A key negative for developers is the increase in minimum alternate tax (MAT) to 15% from 10%. The increase in MAT affects developers with low taxes because of tax breaks for executing government projects.
• Tax exemptions for STPIs extended by a year, which can maintain occupancy levels for IT parks. But this could potentially also cannibalize demand for new SEZ developments in the near term.

On Thursday, the Centre asked States to come on board to formulate new schemes for housing the urban poor on an urgent basis. We hope this is done in a feasible manner. All in all, we will continue to keep our faith and hope that the urgent measures required will be recognized and addressed promptly by this government following the Budget announcements.

There are naturally several expectations from the forthcoming budget as well as speculations about the provisions that will be made available to the real estate and infrastructure sectors this time. Given the year gone by and the newly elected government’s stated sensitivity and urgency towards housing and infrastructure, the expectations from the budget include tax exemptions, easing of fund raising through FDI sources, interest quotient in the case of home loans among others. In the past year, the real estate sector experienced a real slowdown in demand because of the culmination of extraneous factors like rise in interest rates in January-March 2008 by almost 2 percentage points to 12%. At the same time, the prevailing prices of residential apartments in most cities made them unaffordable.

The situation further worsened after global financial markets got affected due to the failure of banks and brokering houses in the US and Europe. This adversely affected the Indian real estate market and demand plummeted.

However, according to World Bank projection, India will grow at 8% in 2010, making it the fastest growing economy for the first time, overtaking China’s growth of 7.7%.In a country of over a billion people, mass scale housing for the general population is the need of the hour for encouraging and sustaining inclusive growth. In the 2001 census, India had a homeless population of 78 million. Delhi had 3.1% of the national level, while Bihar and Tamil Nadu had 1.6% and 7.3% respectively. By all accounts, that figure would have increased substantially in the past 8-9 years. Real estate developers must be encouraged through fiscal incentives to construct small dwelling units at affordable prices and should also be encouraged through Private Public Partnership (PPP). The increase in the construction activity would simultaneously generate millions of job opportunities besides giving a boost to other industries such as cement, iron and steel.

Industry sentiment at present is that the new UPA government will take special measures to bring down the interest rates further to enable the public at large to buy houses. The mantra for developers like us in the present times is to be aware of the changing demand and supply dynamics in the markets. For those who believe that real estate will again become a sellers’ market, it is time for a reality check. The need of the hour is a fresh and honest outlook on deliverables and accountability by developers. Developers should on their part give impetus to the outlook of increasing mutual trust between companies and customers by fostering transparency, be it through their websites, CRM, media communication or corporate blog. This outlook would make the engagement process with the public at large much more interactive, dynamic and mutually rewarding, thereby also allowing the government to look at this sector as an integral partner in the planned growth of the nation.
 
Construction is an integral part of the infrastructure sector and comprises commercial, residential, roadways, waterworks, ports, airports and SEZs. In 2005, the sector generated around 31 million jobs, out of which, the organised sector generated 1.2 million jobs and the unorganized sector generated the rest. Going forward and taking a cue from the government’s ambitious projects lined up for the Eleventh Plan period, the demand for construction is expected to grow by at least 8-9%, and 2.5 million new employment opportunities per annum are expected to be generated.
 
The real estate sector has been asking for extension of tax holiday for five years under section 80-IB (10) for housing projects approved after March 31, 2007. A renewal of section 80-IB, which gives tax waivers to a housing unit built in less than 1,000 sq. ft., should definitely be re-introduced so as to provide a fillip to the construction of much-needed small and affordable homes. This concession was available before 2007! Re-implementation of section 80-IB (10) will greatly help in developing affordable housing in the country. Logically and in keeping with the times, the limit for deduction of interest paid on loans for purchase or construction of houses should also be raised from Rs. 1.5 lakhs to Rs. 3 lakhs.
 
At the same time, we would also like optimum clarity on foreign direct investment (FDI) in retail. The real estate industry requires liberalization in the retail sector for the much needed fillip, especially now when the sector is reeling and feeling the worst effect of the slowdown.  With opponents of FDI in organised retail biting the political dust in 2009, retail players are hoping to expand, especially by way of foreign investments. In 2006, the UPA had encouraged organised retail by opening up FDI in single brand outlets by up to 51%. Unfortunately, the same was not permitted for multi-brand outlets because of the constraints of differing coalition partners at the time. Given that there are many big brands looking at India, government policies will hopefully begin to reflect the greater value, convenience and employment opportunities that retail growth represents for Indian consumers, the industry and India’s overall image as a forward looking nation with a global view.
 
Developers have also been asking for industry status for the housing sector and for extending the definition of infrastructure to include group housing and integrated townships under its fold. With the present government’s stated intent, this should soon become reality.

It gives me real pleasure and satisfaction that Alpha G:Corp’s journey of the past six years has been professionally fruitful as well as a personally satisfying one for all members of the Alpha team. Behind our sustained success are long practiced and well designed systems and processes that incorporate global best practices, transparency, a value-driven approach, customer centric values, all leading to the most valuable virtue in business -- reliability. I, along with my team members, believe that there will always be a healthy demand for quality development and we chose a long time back to follow only the highest global standards in all business matters. It is our good fortune that customers, industry and the media have recognized our products, services and schedules as world-class. In fact, encouraged by the faith reposed in us, we have managed to deliver some of our projects ahead of schedule and thoroughly delighted our customers in the process.

We are committed to first putting in place the entire infrastructure of our projects before selling of space is initiated. This facilitates the ideal working and living environment for our buyers, not just in their lifetimes but also that of their successors.

At the Inaugural Realty Plus Excellence Awards, 2009, Alpha G:Corp was bestowed with the prestigious Award of ‘Emerging Developer of the Year’ for demonstrating excellence in developing and delivering quality real estate properties (residential, commercial and retail) consistently over the past 3 years. Similarly, our City Centre Development, AlphaOne in Amritsar was awarded ‘Highly Commended with Seal of Distinction’ in the Best Mixed Use Development at the Cityscape Asia Real Estate Awards 2009 held at Singapore.

In 2008, GurgaonOne, our first premium eco-friendly 10-acre residential habitat was Semi-finalist in the Sustainable Projects Category at the Asia Pacific Real Estate Awards, 2008 in Shanghai, while our 10 floor office development in Gurgaon for Ernst & Young’s Corporate Office, Golf View Corporate Towers was certified ‘Highly Commended’ in the Best Developer – Commercial/Office (Built) Category at the Cityscape Asia Real Estate Awards 2008 held at Singapore.

In buoyant markets, all developers do well. It is in the downturn that the natural selection process starts and professional developers gain far more recognition and trust from buyers. For us, demand is a function of not only the trust and confidence that we have been able to generate but also the actual quality development work at sites which we try to constantly improve upon with innovations and incorporation of best development practices.

I speak on behalf of the entire Alpha team when I say that our honours and accolades add to our overall sense of responsibility and determination to continue to innovate and set benchmarks that will ultimately benefit the customers as well as help in the evolution of the industry.