The Union Budget 2023-24 was presented on 1st February 2023 by the Finance Minister Nirmala Sitharaman, and it has sparked a lot of discussions and debates across various industries.
The real estate sector is no exception, and it is one of the crucial industries that will be impacted by the budget announcements. In this blog post, we will delve into the insights from a real estate sector perspective to understand the Union Budget 2023-24’s effect on real estate.
As Finance Minister Nirmala Sitharaman introduced the Union Bill for the fiscal year 2023-24, the real estate industry anticipated many measures to reduce the sector’s pressure.
However, numerous critical developer proposals over the last month were not included, which has dissatisfied real estate builders. For instance, infrastructural status was expected by the real estate sector. A long-standing proposal for a single-window clearance mechanism was also not included.
The budget also failed to provide tax relief for the real estate sector.
Even though the above points were not considered, the measures mentioned below should help real estate developers, who have been under a lot of pressure since COVID’s invasion.
For the fiscal years 2023–2024, the Finance Minister predicts the economy to grow by 7%. With an intended capital investment of Rs 10 lakh crore, which is a YoY growth of 33%, more investors would be drawn to the country. This would make more cash available on the market, which would help the real estate industry.
The Finance Minister put a lot of focus on urban planning and growth in Tier 2 and Tier 3 cities in this year’s budget. With a focus on well-planned and sustainable development, the housing market may see a boost.
The National Housing Bank (NHB) will be responsible for providing the Urban Infrastructure Development Fund (UIDF). This will help the government build better infrastructure in Tier 2 and Tier 3 cities. A Rs 10,000 crore has been approved for this fund.
Also, for urban planning, five centers of excellence have been envisioned, which will give the real estate sector a way to hire trained professionals. To propose urban planning policies, initiatives, training programs, and governance, a high-level panel of economists, urban planners, and institutions will be constituted.
A commitment to building PMAY homes worth Rs 79,000 crore is included in the Union Budget for 2023–2024. In comparison to the previous year, this demonstrates a growth of 66 percent. The Pradhan Mantri Awas Yojana will make use of these funds in order to increase the availability of houses at reduced prices.
The Minister of Finance also talked about variations to property taxes that would give cities reasons to strengthen their credit ratings for municipal bonds. These bonds could help resolve issues with urban infrastructure and boost the real estate market in these cities.
Plans to modernize 50 ports and airports are included in the budget for this year. Private investment in urban development, power, railways, and roadways, will be supported by the Infrastructure Finance Secretariat.
Last year’s budget announced a 25,000-km National Highway extension. PM Gati Shakti advocated a unified approach for roads, cargo terminals, and other infrastructure.
Jayakumar Krishnaswamy, the managing director of Nuvoco Vistas Corp. Ltd., adds, “The infrastructure industry gets a big boost from the Union Budget 2023, which will help the economy revive and grow. The industry’s energy needs will be met by the government’s green capital investment. This budget is long-term-focused.”
Many business-friendly policies are included in the Union Budget 2023–24. To make regulations more business-friendly, 39,000 specifications have been cut.
Abhishek Dev, CEO and Co-Founder of Epsilon Money Mart, states, “Simplifying KYC, adopting PAN as a standard business identity, and better use of Digi Locker are all positive moves towards the major aims of simplicity of investment, taxation, and expanded access to financial services for individuals and companies.” This will boost formal economic growth and transparency.
Last year’s Union Budget recommended a Unique Land Parcel Identification Number for digital land records administration.
Transparency in real estate deals was the goal. Plans are also in the works to translate land records from regional languages.
The “One Nation, One-Registration Software” could transform real estate with “anywhere registration” of documents and deeds. The Union Budget has outlined a solid road map, with an emphasis on sustainable growth and urban planning.
The real estate industry has generally reacted positively to the Union Budget 2023-2024. The sector has been facing various challenges in recent years, and the budget announcements are expected to bring some relief to the industry.
According to real estate developers and experts, the capital investment outlay for infrastructure and investment has increased by 33%, leading to increased growth and improved quality of life.
They are also of the opinion that Budget 2023-24 comprises an increase in capital expenditures and income tax exemption limit to help India become a USD 5 trillion economy and global powerhouse.
Real estate experts also believe that India’s global ranking has gone up a lot in recent years owing to the government’s attempts to make it easier to do business. New steps will only make India more competitive. Also, there is a simplification of legal provisions, which is why the Union Budget 2023-24’s effect on real estate is favorable.
Future real estate and infrastructure development are given more priority in Budget 2023. This will make it easier for these industries to create more jobs and hire more people. In addition, to suit the changing demand scenario, we will be seeing more advancement and innovation in the real estate sector.
The Union Budget 2023-24 has provided several key insights from a real estate sector perspective. The government’s focus on affordable housing and infrastructure development has been a positive step for the industry, and the allocation of funds towards these initiatives is expected to bring about much-needed growth and investment.
However, the industry is also facing challenges, including the effects of COVID-19 pandemic and the slow pace of economic recovery. The real estate sector will need to continue to innovate and adapt in order to overcome these challenges and take full advantage of the opportunities presented by the Union Budget 2023-24.
Goodbrick Realty is committed to provide the best possible support in the real estate sector and is optimistic about the industry to grow and prosper in the years ahead.