Impact of 2023-24 Budget on Real Estate
Post by : favouritehomes
While it’s never easy to fulfil the needs and demands of every sector, the Union Budget for the fiscal year 2023-24 showed a lot of positives as well as some downsides for the real estate sector. Though some of the crucial inputs and measures suggested by the developers were missing from the budget, there were other reasons for cheer.
Though there were some omissions, the measures mentioned below by the finance minister are expected to boost realty developers who have already been badly beaten by the recent COVID-19 pandemic.
An economic growth of 7% has been forecasted for the year 2023-24 by the finance minister. Along with this, a capital expenditure of INR 10 lakh crores, signifying a 33% year-on-year increase, has been planned. This is expected to translate to more developments across the country and attract more investors. In the long run, it should improve cash liquidity in the market with a fallout benefiting the real estate sector.
Urban Planning in Tier 2 & 3 Cities
This year’s budget is more focused on development and urban planning in Tier 2 and Tier 3 cities. It is hoped that this sustainable and planned development will provide an impetus to the housing sector too. The NHB (National Housing Bank) will manage the Proposed UIDF (Urban Infrastructure Development Fund). Infrastructure development in Tier 2 and Tier 3 cities by public agencies will also be aided this way. INR 10,000 crore has been proposed for the UIDF fund.
Furthermore, the government has proposed five centres of excellence for urban planning. High-level committees comprising of urban planners, economists, institutions, etc, will be formed to propose urban planning policies, governance, capacity building and implementation of plans.
A sum of INR 79,000 crores has been committed for PMAY houses in this budget, which is 66% higher than last year. This continued push will help increase the supply of low-cost housing under PMAY.
To help cities improve their credit ratings for municipal bonds, a number of property tax reforms are also proposed. These bonds are expected to alleviate urban infrastructure issues and enhance the real estate scenario.
The key highlights from the budget are on green energy, green homes and green infrastructure. The impact on the real estate sector remains to be seen!