The real estate sector is thriving and is working as a driving force to stimulate the economy and that also without any government help and grant. At least 80 major industries are directly or indirectly associated with the real estate sector, including construction industry and many allied industries. However, the government is comes up with one step or the other every year to add some extra trouble on the stakeholders involved in the business and falter the rally of growth and gains half way. Economists take construction boom as integral to economic prosperity. The housing and infrastructural projects create great demand for cement, steel, bricks, glass, aluminum and dozens of other industries and not only are they a source of government taxes, but also jobs and development. However, it is hard to understand who whispers in the ears of the bureaucracy to stop smooth running of the business and stimulation of the economy.
According to newspaper reports, the government is considering increasing property valuation rates by about 30 percent in major cities of the country from July, creating an unexpected stir in this vital sector where the real estate agents and investors are already struggling to sustain their businesses for the last couple of years. The official bureaucracy, in a bid to enhance its revenues, introduces novel ways to extract money and sometimes the effort backfires. There is a need to note that the government will earn a few billion rupees by enhancing the property valuation rates, but the move could increase the cost of infrastructural development projects in the country. The housing industry will also be adversely hit at the end.
It is hoped the government will depute a team of experts to devise a comprehensive tax system for the country, involving all the stakeholders from all the sectors of the economy. A general discussion is necessary to reach a conclusion and, given the rapid changes in the economy, the need to improve the current tax regime has been multiplied. As the population of the country is growing, the list of mega cities will increase and introduction as well as construction of new housing projects will definitely increase the government revenues in the form of taxes.
