The Union Budget 2022-23 might be a watershed moment for the real estate market. The budget statements appear enabling and forward-thinking, emphasising affordable housing and infrastructure development. Due to the Coronavirus-induced problems, India’s real estate business has suffered a slowdown in property sales, fewer site visits, and project delays during the previous few years. The Finance Minister has announced various steps that are expected to impact the industry positively. It is commendable that this budget represents a blueprint that is both modern and inclusive, setting the groundwork for the future.
Industry analysts described the Union Budget 2022-23 as a growth-inducing budget, highlighting the importance of the real estate sector in the Indian economy. It will significantly assist our younger generations, women, and farmers, as well as increase productivity and accelerate economic growth and development, all of which portends well for the real estate industry. The initiatives in Budget 2022-23 have boosted the affordable housing industry and decreased anti-dumping duties on steel.
Let us look more closely at the critical points highlighted to alleviate real estate developers’ fears and their consequences on the real estate market:
1) Economic Pushes:
The Finance Minister anticipates 9.2 percent GDP growth in the fiscal year 2022-23. With a planned capital investment of Rs 7.5 lakh crore, these indications might increase market cash liquidity, directly influencing the real estate industry.
The ‘Gati Shakti Master Plan,’ which included the first outlay of Rs 20,000 crore for 2022-23, was the second primary aim for the real estate sector. This Scheme will be demonstrated as a transformational strategy for economic growth and long-term development. The PM Gati Shakti Master Plan will be built on seven engines: trains, roads, airports, ports, mass transportation, waterways, and logistics.
2) A persistent Demand For Affordable Housing:
Given the ever-increasing need for affordable housing and the need for overall demand generation in the realty sector, which is in the post-pandemic recuperation phase, the industry has issued a plethora of requests to get the industry back on track. With the presentation of the Budget 2022-23, the real estate industry predicted, among other things, relaxations that encourage affordable and rental housing. The Union Budget 2022-23 includes a Rs 48,000 crore promise for affordable housing. The grant will be used to extend the availability of low-cost housing under the Pradhan Mantri Awas Yojana. In the coming year, the plan will assist around 80 lakh families.
3) Focus On Urban Planning:
The Union Budget 2022-23 emphasised the need to develop Mega-Cities as well as a greater emphasis on Tier 2 and Tier 3 cities. These cities are expected to become economic highfliers in the near future. In 25 years, about half of the world’s population will most likely be living in cities. To prepare for this, orderly urban growth is essential. The government seeks to assist and collaborate with the states in developing urban capacity.
With an emphasis on sustainable and planned development, the housing industry might benefit. In addition, five centres of excellence for urban planning have been proposed, which would provide the industry with a channel to attract qualified personnel. To bring about a paradigm change in Urban Planning, the Union Government has announced the formation of a high-powered committee of urban planners, economists, and institutions to provide policy recommendations, implementation strategies, and capacity building relating to urban infrastructure development.
4) Budget Effects On Cooperative Societies:
The Union Budget has recommended lowering the Alternative Minimum Tax from 18.5 percent to 15 percent to alleviate the burden on cooperative groups. The surcharge has also been cut to 7% for income between Rs 1 crore and Rs 10 crore.
5) Infrastructure Projects:
The infrastructure projects head has become quite interesting, as there are plans such as the expansion of highways by 25,000 km across the country, allocating Rs 60,000 crore to the Nal Se Jal scheme, and the start of five river link projects across many states, all of which will help the country’s overall growth. It will accelerate the country’s infrastructure development and benefit the real estate sector.
6) Digitalization Of Records:
One of the key objectives is to digitize land records. The efficient utilisation of land resources is an absolute necessity. States will be urged to use IT-based record management. The Union Budget urges governments to establish a Unique Land Parcel Identification Number so that registration of deeds may be done anywhere in a few easy steps and for the administration of digital land records. Measures are also being taken to translate land records from regional languages. It was done to encourage one nation, one vote registration from anywhere in the country. This Union Budget move will be a game-changer for India’s real estate market.
7) The Steel Budget And Its Impact On Real Estate:
The real estate industry is not a stand-alone unit. It collaborates with a variety of different industries, including steel, iron, cement, and other materials. In the Union Budget 2022-23 announcements, the Finance Minister abolished the Countervailing Duty and Anti-dumping Duty on stainless steel, coated steel, alloy steel bars, and high-speed steel in the public interest, given the current high metal prices, lowering imports from China and supporting local manufacturing. It will have a direct impact on the construction and associated businesses, which rely heavily on steel and steel products in the construction of dwellings
8) Parvatmala: The National Ropeways Development Programme:
Public-private partnerships will be used to implement the National Ropeways Development Programme as a preferred environmentally viable alternative to conventional highways in challenging hilly locations. The goal is to increase commuter connection and convenience while also encouraging tourism. Contracts for eight ropeway projects totaling 60 kilometres in length will be granted in 2022-23.
The Union Budget includes several housing and development programs. The most notable of these is the provision of Rs. 48,000 crores for the completion of 80 lakh dwellings under PMAY. The extension of PMAY till 2023 is a step in the right direction toward providing affordable housing for people in need. Considerably, the Union Budget has laid out a favourable road map, with a promising growth outlook and a focus on urban planning and long-term growth.
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