By Vinod Rohira
The Budget 2019-20, presented by Nirmala Sitharaman, has resonated well with the hopes of the country. It indicates the balanced intent of the government—addressing key issues, with a developmental agenda. It gives the right impetus to the real estate industry with a few noteworthy structural and incremental proposals.
This Budget is a stepping stone to achieving the objective of Housing for All by 2022. It proposes to construct 1.95 crore houses in a record time of three years, by 2022, which reflects the seriousness of the government towards affordable housing. PSU land opening up for joint development of affordable housing is advantageous to the realty industry. Add to this, the `1.5 lakh additional deduction under interest for affordable homes is a welcome move—this subvention will lead to increased disposable income and boost housing demand.
Real estate is highly driven by sentiment, and the Budget is crafted to be a steppingstone in the right direction. It will fuel growth and investment towards agriculture and infrastructure, which will drive employment and stability, right at the base of the country’s population.
The real estate sector contributes to more than 10% of employment and consumption in India, and boosting the support drivers will drive the predominantly domesticated economy. Fuelling bottom-up gives us a strong base that will help us in the larger goal of becoming a $5-trillion economy by 2025.
The industry also applauds the decision of allowing investment in REITs from FPIs and NRIs, as this alternate funding mechanism will ease and improve liquidity in the market, while giving momentum to the high-value property market. The investment of `100 lakh crore on infrastructure will fuel employment and connect the country, which will attract the development of new micro-markets and the growth of urban footprint in India. History is witness that infrastructure development has always led to the formation of newer micro-markets thriving with offices, homes, schools, hospitals and social infrastructure. This augurs well for
The intent of the government has been towards easing of FDI norms, which will provide a boost to the sector with greater foreign capital inflows, more job opportunities and fortifying growth of the realty sector. The Indian real estate sector is seen as a hotbed for global investors and is poised to see good quality assets coming up for sale in the near future, which will help the market clear up the current situation of oversupply.
This Budget will go a long way in setting a benchmark for improving the sector by empowering and incentivising both the developer and end-consumer. Finally, it makes its mark as one that is humane and sensitive to all, ensuring the wellbeing of all strata of society.