Budget 2023-24: Encouraging reforms in urban planning will further boost India’s already thriving real estate sector

The Budget primarily focused on growth driven by capital expenditure while giving an adequate push to rural welfare and agriculture. It extensively covered the seven key focus areas with regard to overall inclusive development, reaching the last mile, infra and investment, unleashing the potential, green growth, youth power, and the financial sector. However, the main highlight of the Budget was the five major announcements under the personal income tax, including a change in tax slab under the new tax regime.

Schemes, tax benefits to enhance consumption

The tax slab reduction and credit subsidy programs have certainly brought a sense of relief to millions of families who struggled during the COVID pandemic and its aftermath of inflation by increasing the threshold limit of no tax up to an income of Rs 7 lakhs per year, thereby increasing disposable income.

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The total rise in the capital expenditure by 33 percent to Rs 10 lakh crore is the shot-in-the-arm and can lead to a multiplier effect on the economy. The percentage of schemes and tax benefits granted to the rural economy and taxpayers will help enhance consumption growth in India.

Apart from giving more disposable income to the hands of consumers, the concerted focus of this Budget on encouraging reforms in urban planning will further boost India’s already thriving real estate sector.

Fuelling ‘green growth’

The government’s continued focus on energy transition with supportive policies and fund allocations can be transformative for India and will fuel “green growth” in the country in the coming years. The greater push for AI, Robotics, IT Labs, and green ecosystems will be sector agnostic and benefit capital inflow along with the Rs 10,000 crores for the urban infra development fund.

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Critical infrastructure like railways and airports will certainly improve regional connectivity which will further lead to long-term economic growth by generating massive employment opportunities and giving a fillip to ancillary sectors like steel and cement.

This Budget enables domestic consumption growth while boosting business and investment sentiment for corporates. The new measures announced in the Union Budget 2023-24 may certainly help unleash the Indian economy’s potential

Boost for affordable housing

The enhanced allocation for PM Awaas Yojana by 66 percent to over Rs 79,000 crores is certainly a boost for affordable housing. Long-term capital gains from the sale of a house should be taxed at 10 percent. The unwavering focus on infrastructure will indirectly drive real estate growth over the next year.

The industry at large was hoping for some boost with regards to lowered interest rates, subsidies for first-time homebuyers, reduced cost to production (reduction of prices for steel, cement), provision of single clearance window, better credit facility to developers, sound policies to support women homebuyers, etc. that could in return help augment the demand in the real estate segment on a large scale.

Nevertheless, overall, we believe that the Union Budget has ushered in a well-balanced combination of reforms and regulations, which will, in turn, will contribute positively to India’s growth story

The writer is Founder Siroya Corp & President, NAREDCO, NEXTGEN Maharashtra. Views expressed are personal.