The passage of the GST will almost certainly have tremendous benefits for property in Ahmedabad. The city of Ahmedabad is a commercial hub with a great deal of buying and selling taking place daily within its borders. The GST would allow the tax net to be broadened while at the same time lower the tax which businesses pay. These dual benefits would make real estate in Ahmedabad more affordable to homebuyers as the price of input costs for construction would fall as builders and the industries associated with them pay lower taxes. At the same time, the revenue of the government would increase allowing them the opportunity to spend more on infrastructure in the city increasing the quality of life of the citizens of Ahmedabad.
Gujarat is one of the most industrially developed states in the country and an engine of growth for India. The impact of the GST shall likely be more pronounced in Gujarat than in many other parts of the country. The GST’s passage shall likely impact builders and developers in Ahmedabad acutely allowing them cost savings necessary to undertake more ambitious projects in the city. Already the state is home to some of the largest factories in the country and has one of the largest numbers of small and medium enterprises in the country.
The wealth multiplier effect shall likely be felt across the state leading to the construction of more luxury apartments in Ahmedabad, as a matter of fact, the GST shall directly result in the construction of more ambitious real estate projects all across the country. Already the status of the Goods and Services Tax is being scrutinized by top global banks such as Goldman Sachs and its prospects are being weighted. Nearly all such large global banks agree on the importance of the GST as an enabler for economic growth.
Goldman Sachs has already indicated that there have already been many great leaps in the ease of doing business in the country over the past few years. Such measures have made it much easier to start a new business in India and have greatly reduced much of the license raj which had bogged down industry in India over the past few decades, particularly before 1990. If passed in the parliament, the GST may add an additional .3 to .5 percent more to India’s annual GDP.
Considering the state of the global economy such a boost in the amount of goods and services produced in the country in one year shall be difficult to match even for the larger neighbor to India’s north. As productivity increases and government collection of revenues too rises, there shall likely be a greater demand for affordable homes in Ahmedabad and other cities. Such an increase in demand shall come from first time home buyers who had thus far been barred from entering the countries property market due to high property prices.
The GST and the comments made upon it by the likes of Goldman Sachs indicate just how far the country has come and how much more interconnected the world has become when Brexit has implications for property in Ahmedabad and Mumbai and as the GST has implications for property in London and Frankfurt.