Union Budget 2023 announcement has gives a road map to steer India Inc. in a global leadership role. Real Estate companies outlined the benefits to their industry from this budget. Following are their views shared with Team Estrade.
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Samyak Jain, Director, Siddha Group
Budget 2023, rolled out by our Hon’ble Finance Minister, Smt Nirmala Sitharaman, has many positives for the Real Estate Industry.
An increase of 66% in the Prime Minister Awas Yojana (PMAY) fund outlay is a step in the right direction, which will not only enhance funding to the lower and affordable housing category, but also is in line with the Government's ‘Housing for All’ policy.
The enhanced capital expenditure of 10 lakh crore for Infrastructure Development will also help fast track implementation of high-multiplier Government Infrastructure programmes within the country; thus supporting the Housing Sector in a big way. Additionally, the proposal to invite more Private Investment participation in Infra Development will pave way in creating better Infrastructure and improving the housing stock.
We are also very happy to note that the First-Time Home Buyers will now be able to better plan to purchase their First Dream Home, as there will be additional savings due to the increase in Income Tax rebate limit from Rs 5 lakh to Rs 7 Lakh in the new tax regime.
The Government’s Fiscal Support in increasing Digital Payments will also bring in further transparency in real estate dealings.
Himanshu Jain, VP – Sales, Marketing & CRM, Satellite Developers Private Limited (SDPL)
The Union Budget 2023-24 continued the government’s focus on the India growth story. The government’s decision to increase the PMAY Fund by 66% to Rs. 79000 crores will be a big boost for affordable housing and is a step in the right direction to achieve the government’s vision of ‘Housing for All’. The Government's continuous efforts to promote affordable housing to the masses will overall give a boost to the real estate sector in the long term. This budget has again focused heavily on infrastructure that will directly impact development of housing and increased demand especially in the Tier II & Tier III cities.
The increase in rebate limit to 7 lakh from 5 lakh in the new tax regime will prove to be a boon for first time home buyers. This additional savings will help them to invest in buying a property and fulfilling their dream of owning a home of their own.
Dr. Sachin Chopda, Managing Director, Pushpam Group
The Urban Infra Development fund (UIDF) proposed investment of Rs 10,000 crore to create infrastructure development in tier II and tier III cities will encourage home buyers to move away from metro cities and seek housing in less congested areas. Peripheral areas outside major cities will also be looked at by home buyers who plan to live there or use it as a second home or simply invest in property and earn rental income from their investment.
The announcement of 50 tourist destinations to be selected through challenge mode and developed as a whole package for domestic and international tourism is a welcome initiative by the government. This has the potential to transform the area from a tourist destination into a second home or weekend getaway. This will help in offering job opportunities for the local people, developing the infrastructure, and improving the lifestyle of the people.
In its fervent attempt to make housing available to a larger section of people, the government has increased the rebate limit from 5 lakhs to 7 lakhs. These savings can spur investments in the real estate sector.
Bhushan Nemlekar – Sumit Woods Limited
“The real estate sector was eagerly looking forward to the Union Budget 2023-24 hoping for incentives and several rebates. Although the focus of the Union Budget 2022 was on overall economic development, the only thing to cheer for the real estate industry was the increase in outlay for PM Awas Yojana by 66% to over Rs 79,000 crore. This is expected to further boost the government's programme to provide housing to the urban poor.
We are also pleased that the government has recognized infrastructure and investment as one of the 7 priorities that the budget is based on. The 33% higher capital outlay of Rs 10 lakh crore on infrastructure development will lay a foundation for Tier 2 & Tier 3 cities to transform into centres of economic growth.
There were heavy expectations for tax deductions and the increase in income rebate limit to Rs 7 lakh from Rs 5 lakh in new tax regime will encourage homebuyers to invest in real estate boosting the overall demand.
It is undoubtedly a progressive budget especially with its emphasis on economic growth and building infrastructure for the country.”
Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory
A tailor-made budget for the salaried and the middle class
The union budget presented by the honourable finance minister, Smt Niramala Sitharaman emphasizes growth and comprehensive development with a view to enhancing citizen welfare. The government in this year’s budget has made allocations to expand infrastructure, healthcare, education, skilling, rural welfare, and digitalization. The government is investing heavily in capital expenditure to invigorate the Indian economy and create new job opportunities.
The central government has reduced taxes across all tax brackets, enabling the middle class to save more of their income. The increase in the income tax exemption rebate from Rs 5 lakhs to Rs 7 lakhs will benefit thousands of people by providing more disposable income in their hands. Lowering personal taxes will provide prospective homeowners with additional funds that they can put towards acquiring a home, which is a solid and reliable investment.
The government has reinforced its commitment to providing housing for all by substantially increasing the funding for the Pradhan Mantri Awas Yojana, from Rs 47,500 crores last year to Rs 79,000 crores in 2021-22. Through this initiative, the government aims to fill the gap between those without decent housing and those who do, by providing a better housing subsidy. This extra funding will help ensure that both urban and rural homes are built quickly and up to the required standards.
The government has also increased the total capital expenditure on infrastructure development by 33%, accounting for 3.3 percent of our GDP at Rs10 lakh crore. This will have a positive impact on the Indian industry and create employment opportunities.
The Centre has offered 50-year interest-free loans to state governments for another year, with a total expense of ₹1.3 lakh crore. This initiative will stimulate infrastructure development in each of the states and also help promote local industries.
Sudhir Pai, CEO Magicbricks.
“The Union Budget 2023 is a bonanza for affordable housing, with the strategic decision to increase outlay for Pradhan Mantri Awas Yojana (PMAY) by 66%! This decision provides the much-needed impetus towards the vision of “Housing for all”. Further, with a 33% increment in infrastructure outlay, the Government is facilitating economic growth through job creation and investments which have direct and indirect impact on the real-estate sector. It is also heartening to see that the government is maintaining its focus on furthering urbanization initiatives, especially with the outlay of INR 10,000 crores per annum for an Urban Infrastructure Development Fund (UIDF) for tier 2 and tier 3 cities. This would certainly give the required boost to the real-estate markets in these cities, which have emerged as real estate growth engines in the past few years. 2022 saw a year-on-year increase in residential demand in cities like Bhubaneswar (12%), Coimbatore (27%), Jaipur (5%), and Nagpur (66%), amongst others, and this initiative will further elevate the livability index and appeal of these cities. Overall, the Union Budget is definitely positive and growth oriented for the real-estate sector”
Nirav Dalal, Executive Vice President- Business Development and Chief Investment Officer, Shapoorji Pallonji
We welcome the measures announced by Finance Minister Smt. Nirmala Sitharaman in the Union Budget 2023–24, which indirectly aims to boost the real estate sector’s growth while also providing relief to consumers. The proposed increase in the income tax exemption limit to Rs 7 lakh will help boost real estate investment. This tax break will encourage homebuyers to invest more while simultaneously increasing revenue. Meeting the long-standing demand of the real estate sector, the cap deduction for capital gains on residential housing investment is set at INR 10 crore, which will undoubtedly benefit the real estate industry. As one of the important measures to support the market, there has been a 66% increase in the allocation to 79,000 crores in the Affordable Housing Fund (PMAY). The budget also has an emphasis on developing smart cities. The budget has allocated the Urban Infrastructure Development Fund (UIDF), which will be managed by the National Housing Bank and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities. The infrastructural development in these untapped markets will help the development of real estate here.”
Ashwin Reddy, Managing Director, Aparna Enterprises Ltd.
The Union Budget 2023–24, the first Budget of Amrit Kaal included announcements which were bold and focused towards growth. The Union Budget announced Government’s keen focus towards seven priorities – Infrastructure Investment and Green Growth being among the seven key focus areas. The guiding force of the Budget will be the steep rise in the Capex to 3.3% of GDP and will provide a strong push to infrastructure and allied industries which comprises the construction and building material industry as well.
The reduction in the income tax slabs of the salaried employees can be eyed as another welcome move encouraging the home buyers to buy new homes thus giving the imperative push to the real estate sector including the construction industry and overall the building material segment which aims to provide sturdiest end products to the buyers. This can help in some way to meet the burden of the rising cost of raw materials, delayed projects owning to cash crunch, etc.
The focus of the Union Budget towards Green Growth will enable the implementation of sustainable and green infrastructure in the overall real estate and construction industry thus providing a valued opportunity for the sector to adopt more innovative, sustainable, and environment-friendly business solutions and practices. Adoption of green fuel, energy, building practices, and eco-friendly building material to reduce carbon intensity will be the next steps in the direction to reduce energy consumption and embodied carbon emissions along with addressing the increasing energy demands of buildings in a more sustainable way to work towards a greener and safe ecosystem.
