Going through tough times for the last few years, the real estate sector had pinned its hopes on the Budget 2023 for getting some boost. However, contrary to the expectations, there were no direct measures or incentives announced in the budget which could benefit the sector going ahead.
The government, however, continued to focus on the affordable housing segment by increasing the capital outlay. The commercial real estate sector would also be benefitted by the incentives provided for start-ups, fintech companies and enhancing ease of doing business.
A majority of real estate experts and developers welcomed the budget, calling it growth-oriented with a long-term view of social and infrastructure development.
Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com & Makaan.com , said, “Overall, the FM presented an inclusive, growth-oriented and fiscally-prudent budget. Rationalisation of income tax, especially at the lower end of the income spectrum, would provide extra funds in the hands of middle-class families and alleviate the burden of increasing interest rates. It may also encourage those on the fence to purchase a home, which is the most trusted asset class for Indians. The demand for housing is already very robust, and the Budget 2023-24 would further galvanise growth for India’s real estate sector.”
The increase in overall capital expenditure, the increased outlay for PMAY, the setting up of the Urban Infra Development Fund and the record capital allocation for the railways will also help create better infrastructure and provide a further boost to the real estate sector.
The budget has allocated a dedicated amount of Rs 10,000 crore per annum through urban infra development fund for Tier II and Tier III cities. This will result in creation of quality of urban infrastructure, thereby improving quality of life. This will also translate into higher demand for housing and commercial real estate.
Commenting on the same, Sandeep Sahni, Chairman, Ithum World, said, “The Budget is focused on the necessity for the systematic development of megacities and Tier 2 and Tier 3 cities for the future. An Urban Infrastructure Development Fund (UIDF) will be set up for Tier 2 and Tier 3 cities and Rs 10,000 crore is expected to be allocated for it annually and National Housing Bank will manage this and public agencies will use the fund to create infrastructure in Tier 2 and Tier 3 cities, pushing real estate players to seek for land parcels in the emerging cities to develop residential and commercial properties. This will create more job opportunities, resulting in more investment in real estate in the prime tier 2 and tier 3 cites.”
Himanshu Garg, Director, RG Group, said, “Changes in the income tax slabs, including exemption for income up to Rs 7 lakh under the new tax regime, will benefit the middle class. However, the overall impact on the housing sector will be positive because this will enable the common people to save more and that may turn into future investment. So the fluctuation is yet to be seen. Also, the urban infrastructure fund of Rs 10,000 crore to be established on an yearly basis focusing on infrastructure development and expansion of smart cities will result in increased demand in tier 2 and tier 3 cities.”
Hailing the Union Budget 2023-24 as a progressive budget, Sumit Agarwal, Director, Sales & Leasing, Bhutani Grandthum, said the introduction of sound and accountable policies, expansion of fund allocations, socio-economic growth catalysts and measures to accentuate ‘Ease of Doing Business’ were the central focus of the Budget 2023, referred to as the first Amrit-Kaal Budget.
“The real estate sector will reap dividends from many of the key announcements made by the Finance Minister. Boosting the paradigms of infrastructural connectivity, the capital expenditure funds have been prominently increased to Rs 10 lakh crore to elevate the urban planning substratum and ratchet up holistic development in multiple corridors. This will boost the commercial real estate sector, which considerably depends on infrastructural robustness for consumer attraction. The proposal to increase the allocation made towards the Pradhan Mantri Awas Yojna by 66% to Rs 79,000 crore this year will help the government to achieve its goal of providing the overall growth of the real estate sector,” he said.
Ashwinder R Singh, CEO-Residential, Bhartiya Urban, said, “Exemptions of taxes up to Rs 7 lakh are a welcome and populous step in promoting the new tax regime, which was introduced in 2020, and improving disposable income, which will propel first-time salaried class buyers to act on their dream of buying their first home and making it a reality.”
“The Budget 2023-24 allocated Rs 79,000 crore for the Pradhan Mantri Awas Yojana (PMAY), giving a further boost to the government’s programme to provide housing. More than 55% of the estimated gap in funding for projects under the scheme is now addressed which will directly lead to the growth in the real estate industry. This will help in timely construction of urban and rural houses.The extension of CLSS will give homebuyers the financial elbow room to make a purchase, but a standard definition for 60m and 90m affordable homes would have given a bigger boost to the housing industry,” said Yash Miglani, MD, Migsun Group.
Uddhav Poddar, MD, Bhumika Group, said, “The budget has announced a record 66% increase in allocation of Rs 79,000 crore under the PM Awas Yojana. Also, this budget takes a holistic view & various initiatives, such as the infrastructure development fund of Rs 10,000 crore will benefit the tier-2 cities by encouraging housing and commercial development in the country. Simultaneously, rebates in income tax, thrust to railways and incentives for start-ups will all have a multiplier effect and promote economic growth, which in turn will boost real estate development in the country.”
Dr. Renu Singh, President, Sales & Marketing, Spaze Group, said, “The Union Budget 2023-24 will bring a transformation in the affordable housing sector with the announcement of an increase in fund allocation of PMAY. The sector will reap the benefits that the government has placed on urban infrastructural development and planning. A scalable increase in demand for both residential and commercial properties is expected after this year’s Budget.”