It Is People's Budget
It is fair to say that this year’s budget is a populist one, focusing on providing social security at the grass root level. The various announcements and funding provided are towards promoting the further growth of small scale industries as well as improving infrastructure, particularly across rural India.
There is some good news for the real estate sector as well. With the aim of improving connectivity the Finance Minister has proposed the redevelopment of over 600 railway stations, completion of 9,000 kms of highways as well as improvement of regional connectivity with UDAN expected to connect 56 unserved airports and 31 unserved helipads in the country. This will have a positive impact on the country’s trade movement. Additionally, the budget also focusses on the development of the suburban railway networks in Bangalore and Mumbai. This focus on infrastructure development is in line with the governments long term objective of making India future ready.
The establishment of a dedicated affordable housing fund under the National Housing Bank for priority sector lending will provide a further impetus to the development of housing in this segment. Additionally, the fact that differentials between market value and circle rates for properties (upto 5%) will not be adjusted, will also help the demand for housing.
From a taxation point of view, the increase in standard deductions to Rs 40,000 per annum will help individuals have more disposable income which could be channeled towards higher investments into real estate.
It was hoped that this year’s budget would finally address the need to put in place single window clearance and accord infrastructure status to the sector. Though these issues continue to remain, this year’s budget has focussed towards strengthening the country’s agricultural and rural sectors, two significant contributors to India’s economy.
