“The budget is not just a collection of numbers, but an expression of our values and aspirations.” – Jacob Lew
The Interim Budget 2024, unveiled by Finance Minister Nirmala Sitharaman, has set the tone for economic revival, and the real estate sector is no exception. Let’s delve into the intricacies of the interim budget 2024-25 and explore its far-reaching implications on the real estate landscape in India.
1. Understanding the Real Estate Focus in Interim Budget 2024
The interim budget for 2024 has earmarked a significant focus on the real estate sector, aiming to catalyze growth through strategic interventions. According to a report by Hindustan Times, the budget outlines a comprehensive approach, emphasizing infrastructure development and introducing a new housing scheme tailored for the middle class.
I. Infrastructure Boost: Paving the Way for Real Estate Growth
The government’s commitment to boosting infrastructure is a cornerstone of the budget. Large-scale investments in infrastructure development will create a ripple effect, positively influencing the real estate sector. As connectivity improves and new projects take shape, the demand for residential and commercial spaces is expected to surge.
The budget allocates substantial funds to enhance connectivity, including the expansion and modernization of transportation networks.
The budget for metro projects is up by 9%, going from ₹19,508 crore in 2023-2024 to ₹21,336 crore in 2024-2025.
Making a crucial announcement with the potential for long-term economic benefits, Sitharaman declared the central government’s plan to construct three railway corridors dedicated to energy, minerals, and cement. Sitharaman also emphasized the swift continuation of the expansion of existing airports and the development of new airports.
II. Housing Scheme: A Game-Changer
One of the standout features of the budget is the introduction of a new housing scheme targeting the middle class. Housing For All Initiative is designed to make homeownership more accessible and affordable for a significant portion of the population. The details of the scheme are yet to be fully revealed, but early indications suggest a combination of financial incentives, subsidies, and simplified processes to facilitate home purchases.
As per government data, funding for the flagship Pradhan Mantri Awas Yojana (PMAY) has surged by 49%, reaching ₹80,671 crore. In the previous fiscal year 2023-2024, ₹54,103 crore was allocated (as per revised estimates).
For PMAY Rural in the Interim Budget 2024-2025, the allocation stands at ₹54,500 crore, a significant increase from the revised estimate of ₹32,000 crore last year. The allocation for PMAY (Urban) for 2024-2025 is ₹26,170.61 crore, compared to ₹22,103.03 crore as per revised estimates in the previous year.
In the interim budget for the fiscal year 2024-25, Finance Minister Nirmala unveiled a plan wherein the government aims to introduce a scheme benefiting deserving segments of the middle class who reside in rented houses, slums, chawls, and unauthorized colonies, enabling them to purchase or construct their own homes.
Additionally, the Finance Minister highlighted the commitment to constructing an additional 2 crore homes for the rural poor over the next five years through the ongoing Pradhan Mantri Awas Yojana (Grameen).
Read More: Tax Talk- Understanding Real Estate Capital Gains Tax in India
2. Expert Opinions: Real Estate Developers Welcome the Budget
A report by the Financial Express emphasizes the budget’s role as a catalyst for the resurgence of the real estate sector. The budget will stimulate both demand and supply through its various provisions, creating a conducive environment for growth.
I. Developer’s Perspective
In a Times Of India article, real estate developers express their positive views on the budget, particularly lauding the announcement of the housing scheme for the middle class. Industry experts believe that this initiative will have a transformative impact on the real estate sector, fostering growth and stability.
CREDAI President Boman Irani expressed optimism about the budget, stating that these initiatives are “encouraging and will contribute to the growth of the housing market.”
NAREDCO President G Hari Babu praised the government’s commitment to housing development through the Pradhan Mantri Awas Yojana – Grameen.
Venkatesh Gopalakrishnan, MD & CEO of Shapoorji Pallonji Real Estate, acknowledged the government’s efforts but called for “targeted measures in the upcoming Union Budget to unlock the sector’s full potential.” He specifically urged an increase in the deduction on interest on home loans from Rs 2 lakh to Rs 5 lakh annually to incentivize homebuyers and boost industry revenue.
Sanjay Dutt, MD & CEO of Tata Realty and Infrastructure Limited, commented, “As they say, sometimes even no news is good news! Expectations are always high, and perhaps this is the first budget by the current government when there is nothing specifically announced for the real estate sector.”
Gaurav Pandey, MD and CEO of Godrej Properties highlighted that measures for stronger urban and sustainable development will positively impact the domestic real estate landscape in the long run.
Anuj Puri, the Chairman of ANAROCK, a property consulting firm, observed, “As expected, the Interim Budget didn’t bring about groundbreaking announcements. However, it maintained its emphasis on improving infrastructure and fostering connectivity nationwide. This is poised to positively impact the growth of the real estate sector, extending beyond major cities to Tier 2 and 3 cities throughout the country.”
II. Market Confidence
The budget has injected a renewed sense of confidence into the real estate market. With a clear roadmap for infrastructure development, tax incentives, and a focus on affordable housing, stakeholders are optimistic about the sector’s trajectory. This positive sentiment is likely to attract both domestic and foreign investments, further fueling the real estate boom.
Conclusion: Charting a New Course for Real Estate
In summary, the Interim Budget 2024, presented by Finance Minister Nirmala Sitharaman, is a key driver for economic revival, especially in real estate. While it brings positive changes like investing in infrastructure and a new housing plan for the middle class, it’s important to note the absence of notable announcements on subsidiary schemes or benefits for home loan interest. These aspects usually encourage home buying, and people are eagerly waiting for more details in the comprehensive budget.
Despite the anticipation for specific measures related to home loans, the budget has injected fresh confidence into the real estate market. With a focus on growth and increased investments, stakeholders are optimistic about the sector’s future, awaiting further insights to fully understand the potential impact on homebuyers.
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