Emancipating from the pandemic, India’s real-estate sector is now ready to bounce back. With the monetary conditions normalizing, key announcements in the union budget have raised hopes for this sector.
Industry leaders are eulogizing, and welcoming decisions taken by Finance Minister Nirmala Sitharaman.
Chief experts deduce that major budget announcements like tax exemptions on affordable housing projects, debt financing by foreign portfolio investors (FPIs) in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), better connectivity will bring back confidence among investors and homebuyers, reviving trust, growth, and investments in this emerging sector.
Union Budget 2021 – ’22
Great steps to ensure the country’s road to recovery
Central Park CMD, Amarjit Bakshi said “The budget is a reflection of the government’s efforts to re-instill confidence and energy in India’s economy for a ‘V-shaped’ recovery. “
He further added “The six pillars of the budget (health, physical, financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and minimum government and maximum governance), as outlined by the FM, will give a direction to the country’s economy, which suffered a huge jolt due to the pandemic.”
“Tax reliefs and the announcement of one year’s tax holiday will bring back confidence in homebuyers and will boost the affordable housing sector. Change in double taxation on NRIs will also act as a catalyst for investment in this sector. The country is on its road to recovery and this budget ensures the same,” Bakshi said.
Additionally, the housing sector was also looked onto, where affordable housing to boost in state capitals and tier-2, 3 cities were disclosed.
To add to this, CEO, Omaxe Ltd said, “State capitals and tier-2, 3 cities will benefit immensely from the government’s focus on sectors like roads and highways, ports, power, urban infrastructure, railways. Add to it, the affordable housing boost, by extending tax holiday for such projects by one year, extending by one year the deadline for first-time homebuyers to avail additional Rs 1,50,000 interest deduction on the home loan, and tax exemption for affordable rental housing will further boost demand for housing in these cities.”
Furthermore, to entice more investment in affordable housing projects, the government also made debt financing more feasible. Executive Director -EXP India, Shashank Vasishta added to the facts saying – “This sector has high hopes when it comes to investment and by making REIT (estate investment trusts) and InvITs (Infrastructure investment trusts) more flexible, new roads of investments will open to augment funds.”
Global investment to strengthen domestic manufacturing hub –
The government has created new portals globally for the growth of the domestic manufacturing hub-‘Atmanirbhar’.
Anuj Kumar Garg, Vice President-Customer Engagement and Distribution, Viridian RED, in his statement said” “From the number of steps proposed to support the MSME sector to set up textile parks, the budget stressed strengthening domestic manufacturing. The Budget proposed additional tax incentives for the companies relocating foreign funds to the GIFT city, which is a laudable decision in the making of GIFT City a global financial hub. From the employment generation to push real estate demand, these initiatives are likely to bring the economic multiplier effect, which is the need of the hour.”
Economic corridors, highways, and metros to kick start commercial activities-
The system also prioritized infrastructure growth and better connectivity.
M3M, Director, Mr.Bansal said emphasized the efforts by the government on infrastructure development saying “The budget has given the adequate emphasis on infrastructural development which is a prerequisite for almost all economic activities in the country. Development of economic corridors, national highways, and metro projects will ensure easy transportation, giving pace to commercial activities. These activities will further spur the growth of the commercial segment of the real estate sector and will indirectly push the housing segment as well.”