Pune: REAL ESTATE SECTOR’S REACTION ON THE INTERIM BUDGET 2024-25

Pune, 1st February 2024:

Sandeep Runwal, President, NAREDCO Maharashtra

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. The focus on transforming India into ‘Viksit Bharat’ by 2047 underscores the government’s long-term commitment to national development. 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.

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.

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.

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.

Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Vice President, CREDAI-MCHI

Budget Boosts Eco-Friendly Real Estate
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.

Nitin Gupta, Founder and Managing Director of Maestro Realtek, shared his views on the Government Budget. He opined, “The budget is positive and has a balanced approach. We welcome the announcements made by the Finance Minister that will benefit the real estate 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 aiming 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, slums, chawls, and unauthorized colonies, to buy or build their own houses. This is likely to free up encroachment areas like slums for easier redevelopment.

Capex outlay allocation to be increased by 11.1% to Rs. 11,11,111 lakh Crore, accounting for 3.4% of GDP – This will unlock the potential for real estate development across assets because a major part of this allocation will be used for various infrastructure upgrades and new projects.

Overall, this budget focuses on fiscal prudence rather than pre-election giveaways. With a slower pace of capital expenditure and reduced welfare spending, the Honourable Finance Minister aims to improve India’s fiscal deficit. The budget also prioritizes private sector investment and assumes higher GDP growth.