The past few years have been a mixed bag for the real-estate sector. While the pandemic in 2020 put construction on hold, 2021 saw the sector’s revival, and 2022 witnessed some record-breaking numbers.
Real estate is one of the biggest contributors to our country’s growth. It is predicted to be worth $1 trillion by 2030 and contribute to around 13% of the country’s GDP by 2025. Undoubtedly, the measures taken by the government play an influential role in the sector’s growth.
The recently tabled Union Budget 2023-24 has further fuelled this growth and might prove to be a crucial turning point for the real estate industry. The Finance Minister announced several measures that are likely to positively affect the sector. Let’s take a look at the same in our blog today.
- Economic boost:
The economic growth for the FY 2023-24 has been forecasted to be at 7% by the Finance Minister. There’s a planned capital expenditure of an estimated Rs 10 lakh crore in the coming financial year. With a YoY increase of 33% estimated, more development would be seen across the country. This will ensure improved cash liquidity in the market, attracting more investors and benefiting the real estate sector.
- Revised tax regimes:
The existing tax rebate slab was Rs 5 lakh. It has now been pushed to Rs 7 lakh in the new tax regime. This will provide additional disposable income for middle-class families and alleviate the burden of increasing interest rates. This new regime could push investments by encouraging those on the fence to purchase a home, thus boosting the affordable and mid-level real estate segment.
- Prioritizing Urban Planning in Tier 2 and Tier 3 cities:
The Finance Minister laid stress on the development and urban planning in Tier 2 and 3 cities in the budget of 2023-24. The housing sector might receive an impetus with the focus now on sustainable and planned development.
The budget has proposed an Urban Infrastructure Development Fund (UIDF), which will be managed by the National Housing Bank (NHB). This fund will further aid public agencies in infrastructure development in Tier 2 and 3 cities. An approximate outlay of Rs 10,000 crore has been proposed for this fund.
The fund will create quality urban infrastructure and thus boost the quality of life at these centres. This will further translate into higher demand for housing and commercial real estate and thus benefit the real estate sector.
- Affordable housing receives a continued push:
The Union budget has committed a sum of Rs 79,000 crore for PMAY houses for 2023-24. This 66% increase will largely boost the supply of low-cost homes under the Pradhan Mantri Awas Yojana and benefit small developers. It will also help the government to achieve its goal of empowering the overall growth of the real estate sector.
With the introduction of sound and accountable policies, expansion of fund allocations, socio-economic growth catalysts, and emphasis on ‘Ease of Doing Business,’ the first Amrit-Kaal Budget is hailed for being growth-oriented with a long-term view of social and infrastructure development.
Industry experts say, “Overall, the FM presented an inclusive, growth-oriented, and fiscally-prudent budget. The demand for housing is already very robust, and the Budget 2023-24 would further galvanize growth for India’s real estate sector.”
To conclude, the FY 2023-24 Union Budget has laid a positive roadmap, for a promising future of growth, with emphasis on urban planning and sustainable growth.
At RGS Realty, we believe in the idea of inculcating goodness at every step. With our blogs, we strive to keep our audience updated with the latest developments in real estate and empower them to choose what’s best for them. To know about us and what we do, visit https://www.rgsrealty.com/
References: