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Union Budget 2018: Here is what insurance, real estate and tourism sector expect

These sector has been at the forefront of the Modi government agenda on account of its potential to propel economic growth significantly.

Union Budget 2018: Here is what insurance, real estate and tourism sector expect

On February 1, Finance Minister Arun Jaitley will get down to deliver his fifth annual Budget 2018-19, and, all eyes will be on his announcements for sectors like real estate sector, insurance sector, and tourism industry.

These sector has been at the forefront of the Modi government agenda on account of its potential to propel economic growth significantly. Hence, it is imperative that this sector gets due weight in the upcoming budget for the policies and incentives that aid the development of these sectors.

Here, are the expectations of real estate, insurance and tourism industry from Budget 2018

1. Khushru Jijina, Managing Director, Piramal Finance & Piramal Housing Finance, said, "2017 was a turbulent year for the Indian real estate sector and one marked by change in the form of the aftermath of demonetisation, the promulgation of the Real Estate Regulatory Act (RERA) and the introduction of the GST regime. Our wishlist from Budget 2018 would be the inclusion of the RE sector in its entirety under the ambit of GST. 

"The rate of tax on specified affordable housing schemes has been notified as 8% which is still quite high and could be reduced to 5% instead to provide the necessary boost towards truly achieving ‘Housing for All’,  a priority initiative for the Government. Incentives for first time home buyers under 80EE was restricted to properties valued at Rs 50 lakh or less. The reality of prices exceeding this amount in most metro cities suggests that the limit can be increased such that benefit to first time home buyers are achieved in both letter and spirit. 2017 also restricted the loss from house property to Rs 2 lakh (which was unlimited earlier) which has severely curtailed the demand and investment rationale for second home properties as income yielding assets."

2.  Premanshu Singh, CEO, Coverfox, said, "The finance minister should consider reducing the GST rates on the purchase of pure-risk based insurance products. That itself will make premiums for products like health insurance more affordable. While the government has always taken steps towards promoting crop insurance, we feel that insurance products for business tools and equipment (especially those employing renewable energy) should be promoted.

"We feel that there is a need to build a framework of subsidies where insurers are encouraged to reach to the rural areas. Providing incentives to the technology led digital channels either in the form of better remuneration or tax holidays, incentives to drive microinsurance and making insurance a mandatory element of individual tax planning are some of the ideas that should work. Softer, incremental changes should be replaced by a disruptive focus on building insurance in the country."

3. Abhijit Mishra, Regional Manager, India & Middle East of KAYAK, said, "The tourism industry has come a long way in the past decade but there is a lot which still can be done for the growth of the sector. One of the biggest challenge is high taxes levied on the sector which is certainly making India an expensive travel destination. For instance, Indian tourists are paying more for hotel rooms when they travel domestically as compared to other international inbound travellers Exemption of service tax in the sub-INR 1000 hotel room category will surely boost the budget travel sector tremendously. Along with the trend of eco-tourism, medical tourism and conservation hospitality, tax cuts for the hotel sector will go a long way in helping these valuable sub-sectors.

"Additionally, with the government’s recent move of relaxing the Foreign Direct Investment in the aviation sector, we expect some further big-ticket announcements for the aviation sector in Budget 2018. The Indian government must continue to adopt policies that encourage travelers, such as the new visa regime, enable investment in vital infrastructure, and allow companies to do business conveniently. With the right policies in place, there is no doubt that we will continue to grow towards ranking even higher in terms of its tourism economy. We are all eagerly waiting for the Union Budget, and I wish our Finance Minister a very good look for the upcoming budget plans and would like to thank him for showing sincerity and commitment to kick-start our economy and make a competitive environment in our country."