The real estate sector anticipates that the upcoming Union Budget 2023-2024 should support demand creation and drive a sustained growth cycle. With an impressive growth trajectory last year, India’s real estate market is now looking forward to the favourable announcements in the upcoming budget, further giving a solid push to the already thriving sector.
The development of infrastructure correlates positively with the performance of all real estate asset classes. The government has made significant investments in infrastructure over the last few years, and the upcoming budget may focus on increasing those efforts even further. The Smart Cities Mission significantly boosted the realty sector, bringing more prominence to Tier II cities.
The mission also gave a substantial boost to the real estate and infrastructure sectors in Tier II cities which underwent complete makeovers due to the mission’s emphasis on infrastructure development. Non-metro cities might likely find significant consideration in the budget providing a fillip to the domestic economy of the region and further opening investment routes in such cities. The anticipated push in the budget will bring those developing cities on par with the larger metropolitan cities.
The real estate sector hopes that the budget will address the need for single-window clearance to facilitate fast-track approvals in the system, ease business operations, and attract investments. Furthermore, the industry players also hope that the budget will offer more incentives to promote affordable housing as this segment stands very appealing in line with the government’s “housing for all” initiative. For affordable housing to align with different city market dynamics, the government should consider revising the qualifying price bands this year. By doing so, more homes would qualify as affordable housing, and many more homebuyers could benefit from the current government subsidies and reduced GST at 1%.
This year’s budget should also provide some relief from personal taxes by reducing tax rates or modifying tax slabs. With general tax slab changes, the real estate industry also hopes the government to increase disposable income, which will benefit all sectors. Also, the government should provide more tax breaks to investors and homebuyers. Furthermore, in light of rising inflation, stakeholders are urging the government to raise the deduction limit for interest on home loans to Rs 5 lakh from the present limit of Rs 2 lakh to increase housing affordability.
The real estate sector anticipates positive developments from Budget 2023 that will give the industry a powerful boost to thrive further. Also, if granted industry status, the real estate sector would greatly benefit since it would facilitate ease in financing, eventually boosting the investments besides enhancing borrowing capacity.