The Union Budget 2023-24 has elicited a mixed response from the real estate sector. While the push for the affordable housing sector and urban infrastructural development through expansion of fund allocations have been praised unanimously, several demands of the real estate sector were unmet. Described as the first budget of Amrit Kaal, the ‘Infrastructure and Investment’ standpoint was outlined as one of the important economic agendas of the government, and hence capital investment outlay has seen a significant jump of 33% to underscore the country’s socio-economic growth.
Budget 2023-24
Ankit Kansal, Founder & MD, 360 Realtors, said, “In the budget session, GOI has shown its commitment to systematically dismantling structural bottlenecks, fueling infrastructure growth, and working on the fundamentals. The INR 10,000 Crore urban infrastructure fund is a welcome step, as this will help Tier 2 and 3 cities and bridge their gap with larger metros in India. This will also fuel demand for commercial and residential real estate in such parts of the country. The government has also increased capital expenditure to INR 10 lakh crores, almost three times than compared to 2019. Increased investments towards urbanization, power, water supplies, construction activities, etc. will naturally invigorate realty demand by catalyzing economic growth and urban development.”
Narayan Bhadana, MD, 4S Developers, says, “Even though there has been no big-ticket announcement for the real sector in the country but certain announcements by the finance minister, such as income tax rebates, a jump of 33% to Rs. 10 lakh crore in capital investment outlay, focus on states and cities to take up urban planning, and thrust on infrastructural development will boost economic growth and prosperity and will have a multiplier effect on the real estate development.”
Harpal Singh Chawla, Director Spaze Group, says, “In order to achieve the government’s third economic agenda of ‘Infrastructure and Investment’, the Finance Minister, in her speech, eloquently announced that the capital expenditure will be increased by 33% to bolster the infrastructure apparatus and urban town planning of the country. This will invariably sate the demands of the residential and commercial real estate sector. The allocation of Rs. 10,000 crores to urban infra fund development will also bring a flux to the realty sector, pushing the demand rate upwards. The 66% rise in the PMAY funds to 79,000 crores bodes well for the affordable housing sector and will lead to a resurgence in its absorption rates.”
Rajesh K Saraf, MD, Axiom Landbase, said, “The fiscal policies adopted by the government with regard to improvement in urban infrastructure and connectivity are a pro-development dispensation. The Finance Minister outlined that the capital expenditure will be surged by 33% to upgrade the infrastructural quality and boost job markets and employment opportunities. This will also act as a stimulus for private players to enter the scene and encourage public-private partnerships. The policy corpus will also lead to a staggering increase in real estate demand and opportunities. A sound approach towards making urban infrastructural connectivity robust through the allocation of Rs. 10,000 crores to modernise towns and cities serves as a fitting decision to boost the housing and commercial RE sector.”
Kushagr Ansal, Director, Ansal Housing, says, “A significant infrastructure push by the Government will broaden the scope of real estate development across the nation. The announcements regarding the focus on MSMEs, startups, and other efforts will help boost the economy and launching the rebuilding process. The real estate sector will indirectly benefit from the focus on infrastructure and job creation. The best takeaway for real estate was the remark on ease of doing business, projected to streamline business procedures and government clearances.”
Prateek Mittal, Executive Director Sushma Group, said, “This budget will boost realty prospects in tier 2 cities as it allocates Rs. 10 lakh crore in capital investment outlay and intends to set up an urban infra development fund with an annual allocation of Rs. 10,000 crore. Together, these two steps will lead to a massive creation of infrastructure – road, rail, metro and airports immensely benefitting the tier 2 cities. Further, a net reduction of 20-25% in income tax rates will also increase disposable income, and some of it will be invested in real estate.”
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