Realtors been requesting industry status for years, and the govt once again belied the hopes.
The Interim Budget for 2024-25 presented by Union Finance Minister Nirmala Sitharaman reflects a comprehensive vision aimed at fostering inclusive growth and sustainable development in India, said Sandeep Runwal, President, NAREDCO Maharashtra.
The focus on transforming India into ‘Viksit Bharat’ by 2047 underscores the government’s long-term commitment to national development, he said. This vision, encapsulated in the slogan “sabka saath, sabka vikas” (together with all, development for all), emphasizes the inclusive nature of the government’s approach, he said.
The emphasis on GDP, redefined as governance, development, and performance, is a strategic move, particularly in the context of the upcoming general election. This redefinition indicates a shift towards a holistic view of economic growth, one that intertwines effective governance and sustainable development with performance metrics. It’s a narrative that might resonate well with the electorate, considering the administration’s bid for a third consecutive term, Runwal said.
The commitment to the PM Awas Yojana Grameen, with the target of constructing 2 crore additional houses, continues the government’s focus on rural development. Achieving the milestone of 3 crore houses under the rural housing scheme and setting an ambitious target for the next 5 years reflects a significant investment in infrastructure development that addresses a basic need – housing.
The announcement of a new housing scheme for the middle class is particularly noteworthy. This initiative seems to be aimed at addressing the housing needs of those living in substandard conditions like slums and chawls or those burdened by rent. By facilitating home ownership, the government is not only looking to improve living standards but also to stimulate the real estate sector and associated industries, Runwal said.
Overall, the budget appears to be strategically crafted with an eye on both immediate and long-term goals. It caters to key segments of the population – the rural poor, the middle class, and those looking towards the government for improved governance and development. The success of these initiatives, of course, will depend on effective implementation and the government’s ability to meet these ambitious targets, he added.
Anuj Puri, Chairman – ANAROCK Group, said as anticipated, the Interim Budget 2024 made no big-bang announcements, but it continued its focus on infrastructure upgrades and building connectivity across the country. This will benefit real estate growth in not just the top cities but in Tier 2 & 3 cities across the country.
The FM made some announcements that will go on to benefit the sector both directly and indirectly:
- PM Awas Yojana (Gramin) – Despite all the challenges, the implementation of this scheme continued, achieving the target of close to 3 crore houses and now aims for 2 crore more houses to be taken up in the next five years.
- Housing for the middle class – The Government will launch a scheme to help deserving sections of the middle class, living in rented houses or slums, or chawls and unauthorized colonies, to buy or build their own houses. This is likely to free encroachment areas like slums for easier redevelopment.
- Capex outlay allocation to be increased by 11.1% to INR 11,11,111 lakh Cr, accounting for 3.4 % of GDP – This will unlock the potential for real estate development across assets because major part of this allocation will be used for various infra upgrades and new projects.
- Transit oriented development in urban areas – this may give a boost to housing demand in cities and lead to rise in residential prices.
- Development of iconic tourist centres – this is likely to favourably impact the hospitality sector with hotels and restaurants across categories. Moreover, long-term loans proposed to states for tourism.
- Extending tax benefit to startups for another year – this may help the office real estate to rejuvenate.
Key Unmet Expectations
- Industry status:The industry has been requesting industry status for years, believing it would unlock benefits like easier access to credit, tax breaks, and infrastructure development. This wasn’t explicitly addressed in the interim budget.
- Tax benefits:Tax incentives for homebuyers, such as increasing the deduction limit on home loan interest under Section 24, were expected. The interim budget remained silent on this as well.
- Affordable housing:Boosting allocations for schemes like PMAY (Urban) to improve affordability and encourage new projects in this segment was a key expectation. No major announcements appeared in the interim budget regarding this either.
While the interim budget didn’t directly address the real estate sector’s key demands, the upcoming Union Budget might hold more concrete measures addressing industry concerns and potentially impacting market trends.
Here are some more reactions:
Sidharth Pansari · Director of Primarc & President of Credai Bengal: “We need to bear in mind that it is an interim budget while considering expectations for the economy going forward. Having said that, Hon’ble Finance Minister has given a confident budget ensuring focus on empowering the poor, women, youth and the farmers. The aim of fiscal consolidation is praiseworthy. The government’s commitment to help the “deserving” sections of middle class to build their own houses, will have a positive impact on the real estate sector going forward. The proposal to increase the budget for infrastructure outlay by more than 11% shows the government’s commitment towards tangible development. Also, the “Tech push” with a substantial corpus will ensure advancement not only in the defence sector but also in the manufacturing capabilities. Extension of tax benefit for Start-ups to March 2025 is a welcome move as it will promote and instil confidence in young entrepreneurs of the country.”
Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Vice President, CREDAI-MCHI: The Interim Budget 2024, delivered by Finance Minister Nirmala Sitharaman, exemplifies a conservative and assured fiscal plan. The authorisation of an 11.1% rise in capital spending to Rs 11.11 lakh crore, equivalent to 3.4% of GDP for the fiscal year 2024-25, is a welcome step that matches with market expectations, promoting an atmosphere conducive to economic growth.
Similarly, the government’s dedication to infrastructure development is demonstrated by its emphasis on supporting worthy members of the middle class, particularly those living in slums or leased housing. This initiative is designed to facilitate the purchase or construction of their own homes. The ambitious objective of building two crore residences in rural regions over the next five years under the PM Awaas Yojana – Gramin is a notable endeavour. Furthermore, the near completion of the 3 crore home objective under the PM Awaas Yojana – Gramin and the start of a rooftop solar project to give free power to 1 crore families are excellent initiatives. Likewise, allocating 70 percent of these houses for women, emphasizes the government’s commitment to gender-inclusive development.
The budget’s emphasis on green initiatives, bio-manufacturing, and blue economy activities is expected to have a substantial influence on real estate markets. The promotion of sustainable alternatives such as biodegradable polymers and bio-agri-inputs creates opportunities for environmentally aware real estate construction.
Furthermore, the extensive expansion of tourist centres, together with the implementation of a facility grading framework, presents exciting opportunities for the hotel industry. This is projected to help real estate in important tourist-friendly areas.
The Interim Budget 2024 represents a forward-thinking approach, tackling critical areas while driving the country towards a brighter, more sustainable future. The Finance Minister declared that the forthcoming July Budget will contain the comprehensive Vikasit Bharat agenda. She emphasized the needs and aspirations of the Garib, Mahilayen, Yuva, and Annadata, highlighting the government’s primary priorities, and we applaud her and the government for the same.
Samyak Jain, Director, Siddha Group: Firstly, the Finance Minister’s emphasis on India as a “youthful nation with lofty aspirations” is a nod to the country’s demographic advantage. This perspective is crucial as it underscores the government’s commitment to harnessing the potential of its young population, which is pivotal for long-term economic growth and innovation.
The budget’s continued focus on infrastructural upgrades is a strategic move. By investing in infrastructure, the government is not only enhancing the country’s physical capabilities but also indirectly boosting the real estate sector.
The announcement of a new scheme to aid the middle class in acquiring or building their own homes is a commendable initiative. Targeting those living in slums, chawls, or rented houses, this scheme could be a crucial step towards inclusive development and addressing the urban housing shortage. It demonstrates the government’s recognition of the housing challenges faced by a significant section of society and its commitment to ensuring housing for all. This scheme, once effectively implemented, will have far-reaching impacts on social stability, urban development, and quality of life.
Tax incentives for home buyers in this budget could have been a significant catalyst in further promoting home ownership and boosting the real estate sector.
Overall, the Interim Budget for 2024-25 appears to balance continuity in policy with new initiatives aimed at inclusive growth and development.
Himanshu Jain, VP – Sales, Marketing & CRM, Satellite Developers Private Limited (SDPL): Given this is an Interim budget we believe today’s Union Budget presented by Finance Minister Nirmala Sitharaman is not a populist but a visionary one. It continues with the government’s commitment to an inclusive growth and sustainable development policy.
The government’s announcement to set up a 1 lakh crore corpus for tech savvy youth from the private sector with low or nil interest free loans is a welcome move. This will create a huge demand for commercial properties and give a major boost to the start-up business as well.
The government continues with its focus on rural upliftment with the decision to construct 2 crore houses for the rural poor, over the next 5 years. This is under the Pradhan Mantri Awas Yojana Gramin which is a positive step.
The government has given due recognition to the burgeoning middle class of our society by introducing a housing scheme for them, which will offer those residing in chawls or slums an opportunity to shift into more respectable housing enclaves.
However, there has been no mention on raising the tax rebate threshold which would offer additional tax benefits to first time home buyers in the affordable housing segment. Given the high cost of living in urban cities, this would have come as a big relief to them.
Akash Pharande, Managing Director – Pharande Spaces: Unfortunately, the interim budget 2024 didn’t directly include any major positive changes for India’s housing industry. While the expectations included industry status, tax benefits, affordable housing boosts, and easing liquidity issues for developers, none of these materialized in the interim budget.
However, there are a few ways we could interpret the situation cautiously optimistically:
– Indirect benefits: The focus on infrastructure spending might indirectly benefit the housing industry by improving connectivity and boosting overall economic activity, potentially leading to increased demand.
– Focus on affordable housing: While lacking specific budget allocations, the government’s recent emphasis on “Housing for All” and Pradhan Mantri Awas Yojana (PMAY) could translate into concrete measures later.
– Uncertainty avoided: The absence of negative changes may be seen as a positive in an environment where economic headwinds exist.
This is only the interim budget, and the main Union Budget in February will hold more substantial announcements. Even without direct intervention, government policies impacting interest rates, inflation, and economic growth can significantly influence the housing industry.
Piyush Bothra, Co-Founder and CFO, Square Yards: The government’s announcement regarding the construction of an additional 20 million homes under the Pradhan Mantri Awas Yojana- Rural (PMAY) underscores its commitment to promoting inclusivity and ensuring ample living accommodations for all. This initiative is poised to significantly elevate housing standards in rural areas, catalyzing growth in the housing sector within these regions. Furthermore, the pledge to introduce a housing scheme specifically catering to deserving sections of the middle class, currently residing in rented houses, slums, chawls, or unauthorized colonies, represents a significant stride towards providing a sense of security and pride. Enabling these individuals to purchase or build their own homes not only fulfills their dreams but also contributes to fostering a stronger and more resilient community.
Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd: The Finance Minister underscored the government’s recognition of the significance of homeownership. In a notable announcement, the FM stated a housing scheme would announce soon targeting the middle class, extending to those residing in rented houses with the aim of facilitating the construction or purchase of their own homes. This initiative is expected to revitalize the Mid housing & Affordable housing sector.
Moreover, with the economic scenario improving and the average real income of individuals witnessing a 50% increase, optimistic expectations abound for the real estate sector to thrive across all segments.
An additional favorable development is the government’s unwavering focus on infrastructure development, reflected in the 11.1% increase in the outlay for infrastructure. The government’s ambitious goal of transforming India into a ‘Viksit Bharat’ by 2047 is poised to create a conducive environment for the expansion of the overall economy and the real estate sector as well.”
Badal Yagnik, Chief Executive Officer, Colliers India: The Interim budget was laid on the premises of infrastructure, housing, green energy initiatives and innovation, setting up the foundation for a 6-7% sustained GDP growth in the next few years. The unwavering commitment to infrastructure development stands as a cornerstone for fostering economic growth, extending tangible impact on the real estate sector in the longer run. The strong 11.1% YoY increase in infrastructure outlay to over INR 11 lakh crore signals a steady and significant wave of upcoming developments and opening of vast opportunities for all stakeholders including real estate. The continued emphasis on green growth, particularly through the promotion of electric public transport and charging infrastructure development, further positions India on the path of sustainable and environmentally conscious real estate development. At the same time, the government’s persistent emphasis on affordable housing unveils a myriad of opportunities for residential developers, as they position themselves to make substantial contributions, aligning with the broader vision of inclusive and accessible living. Amid positive market synergies in the form of stable interest rates, attractive incentives and increased affordability, domestic investors too are likely to resonate upbeat confidence towards all real estate segments.
Harish Fabiani, Chairman, IndiaLand Group: In response to the Union Budget 2024, IndiaLand is energized by the government’s clear focus on propelling the real estate sector into a new growth era, particularly through its commitment to affordable housing and infrastructure enhancement. This budget, with its strategic initiatives aimed at supporting individuals in rented homes or slums, is a crucial step towards inclusive urban development, aligning with India’s ambitious goal to become a USD 7 trillion economy by 2030.
Key highlights such as the expansion of airports under the UDAN scheme and the allocation of significant funds for infrastructure signal a transformative period for commercial real estate. These moves promise to unlock new opportunities, especially in Tier 2 cities, enhancing connectivity and accessibility, which are vital for the sector’s growth.
The budget’s fiscal strategy, setting the FY25 fiscal deficit target at 5.1% of GDP and revising the FY24 deficit to 5.8%, alongside efficient revenue management, underscores a stable economic environment conducive to real estate development. With gross market borrowing at ₹14.13 lakh crore and net borrowing at ₹11.75 lakh crore, the government showcases its commitment to maintaining fiscal health, instilling confidence among investors and stakeholders in the real estate market.
IndiaLand is poised to leverage these opportunities, contributing to India’s infrastructure development and economic expansion. The Union Budget 2024’s focus on affordable housing, enhanced connectivity through infrastructure investments, and fiscal prudence offers a promising landscape for the real estate sector to thrive. We are optimistic about our role in driving forward India’s urban transformation and economic growth, in line with the nation’s vision for a prosperous future.
Amit Goyal, Managing Director, India Sotheby’s International Realty: The Finance Minister’s Budget 2024 speech was both positive and encouraging, shedding light on the reasons behind economic growth, including the robust demand in the real estate sector, particularly in the high-end and luxury segments. The government’s focus on affordable housing, with the announcement of a special scheme for those living on rent, is anticipated to contribute to the overall growth of the real estate sector.
The proposed scheme will contribute to more housing developments in the country, boosting the real estate landscape to newer heights. Moreover, with new financing and entrepreneur-friendly policies, India will witness more people becoming high-net-worth individuals, hence more likely to invest in real estate.
The FM articulated that people are experiencing improved living standards and enhanced earnings, coupled with heightened aspirations for the future. She also mentioned that the average real income of individuals has witnessed a substantial increase of fifty per cent, and inflation has remained moderate.
People have been empowered to pursue their real estate aspirations through the effective and timely delivery of programs and large-scale projects. The FM expressed optimism, anticipating the continuation of this trend, projecting the next five years to be a period of unprecedented development in India.
Suresh Mutha, Managing Director at M20 Urban Spaces: “It is great to hear that our economy is doing well, there is macro-economic stability, including in the external sector and that investments are robust. The mention of the geographical inclusivity through development of all regions of the country is great news for the real estate sector. The ‘housing for all’ scheme has already won the hearts of many in the country and I hope the scheme is continued in all good spirits. I welcome the scheme to help deserving sections of the middle class living in rented houses, or slums, or chawls and unauthorized colonies to buy or build their own houses. We stand with the country in building a modern infrastructure. Positioning India as an attractive destination for business and conference tourism is a great move which would give huge financial benefits. Promoting iconic tourist centres in the country will create more jobs, as well.”
Gaurav Pandey, Co-Chairman, FICCI Committee on Urban Development and Real Estate and Managing Director and CEO, Godrej Properties Ltd: “The measures for stronger urban and sustainable development will have a positive bearing on the domestic real estate landscape in the long run. The increase in allocation for urban and affordable housing, showcases the government’s commitment towards housing for all. We are optimistic that these initiatives will drive economic growth and contribute to significant enhancement of urban infrastructure and overall sustainability. Overall, the budget is in continuation of the government’s push towards improving India’s infrastructure and we look forward to continuing to play our role in nation building.”
Aditya Kushwaha, CEO and Director Axis Ecorp: “While the interim budget did not feature substantial announcements specifically addressing the real estate industry, we acknowledge the government’s broader vision outlined for ‘Viksit Bharat.’ The notable announcement was the revised fiscal deficit estimate at 5.8% of GDP, underscoring a commitment to fiscal responsibility and the cultivation of a stable economic environment.
Moreover, the budget’s focus on promoting tourism is promising, holding the potential to greatly benefit the real estate and hospitality industry by opening up new avenues for growth and investment”.
Rahul Mehrotra, MD & CEO, RHDFCL: This budget lays the foundation for a more inclusive and prosperous India, showcasing the government’s commitment to holistic growth and development.
The Interim Union Budget 2024 has prioritized the betterment of the economically weaker sections, women, farmers, and the youth, recognizing their crucial role in nation building. The pledge to build an additional two crore houses in the next five years under the PM Awas Yojana Grameen is laudable. It underscores the government’s commitment to ensuring housing for all.
Honourable Finance Minister Ms. Nirmala Sitharaman’s announcement of an upcoming scheme targeting the middle class, especially those living in rented houses, slums, and unauthorized colonies, is a positive stride towards inclusive growth.
Anticipating a comprehensive roadmap for Viksit Bharat in the Full Budget this July, we believe it will reinforce the government’s dedication to economic development and welfare.
Aakash Patel, Director, Atul Projects India Pvt. Ltd.: The Interim Budget for 2024-25, as outlined by Finance Minister Nirmala Sitharaman, offers a mix of continuity and new initiatives, reflecting a blend of optimism and practical considerations in the face of India’s current economic landscape.
The Government’s focus on the youth reflects a strategic move to harness the potential of India’s demographic dividend. The acknowledgment of the country’s young population’s aspirations and optimism is crucial. This focus could lead to policies that not only empower the youth through education and skill development but also fuel innovation and entrepreneurship.
The proposed scheme to assist the middle class in acquiring or building their own homes is a significant step towards addressing the housing crisis. While the lack of direct tax benefits for homebuyers might be a point of contention, the government’s focus on infrastructure and the new housing scheme for the middle class are steps in the right direction.
Extending tax benefits to start-ups for an additional year is a strategic decision that could significantly impact the Indian start-up ecosystem. This extension provides much-needed support to budding entrepreneurs and emerging businesses, encouraging innovation and risk-taking. Furthermore, this move could have a positive ripple effect on the commercial real estate sector, potentially leading to its rejuvenation.
Overall, the Interim Budget 2024-25 seems to be aligned with the broader goals of economic growth addressing immediate needs like housing, while also laying a foundation for long-term growth through support to start-ups and youth empowerment.
