Union Budget 2023 | How the real estate sector reacted to the Budget

Union Finance Minister Nirmala Sitharaman is going to present the last full budget of the second term of the Narendra Modi government in Parliament on February 1. Here's what experts, industry insiders are expecting from this year's Budget. Stay tuned to DH for the latest updates!

This budget lays greater emphasis on further development in the fields of infrastructure and real estate: Chetan Patel, Director, Gurukrupa Group

"India is yet to achieve the true potential especially in real estate and allied sectors, this budget lays greater emphasis on further development in the fields of infrastructure and real estate. This will definitely help the sector in generating more employment. Along with these we will also see more technology led innovation happening in real estate in order to cater to the change in demand landscape. This may also pave the way for more MNC to enter the Indian market thereby increasing the overall efficiency of the sector"

The increase in allocation for PMAY by a significant 66% would help continue capital flow under CLSS and other related schemes: Samantak Das, Chief Economist, and Head of Research and REIS, India

“The 2023 Budget, in a pre-election year, sought to build on the roadmap laid down by previous budgets, focusing on inclusive development, fostering growth and job creation while keeping the macro-economy in a stable yet growth-oriented mode. It has given more money into the hands of individuals and households which would, to a large extent, ease out the increasing pressure on account of home loan EMIs and rising home prices. The increase in allocation for PMAY by a significant 66% would help continue capital flow under CLSS and other related schemes. Addressing the need for creating sustainable cities of tomorrow through urban planning, ease of land availability and promoting TOD schemes will be key towards sustainable development moving forward. Focus on overall infrastructure development and on Tier 2 and 3 cities will be key to overall economic development. The Budget is a balanced one for the economy while missing out on key real estate sector demands.”

Government looks promising in fulfilling its pledge towards affordable housing for everyone: Shiv Parekh, Founder hBits

PM Awaz Yojana has been one of the most talked about and awaited aspects in the real estate sector this budget. Pradhan Mantri Awas Yojna promised the citizens of the country, pukka houses for everyone in the country by 2024. And increasing the PM Awas Yojana outlay by 66 per cent to ₹79000 crore this budget, is a great move by the government. Government looks promising in fulfilling its pledge towards affordable housing for everyone. This will improve the sentiments for real estate developers and consumers and real estate will witness a bigger boost in the smaller cities and towns now. With more usage of raw materials, we expect a price parity in raw materials too, which is significant for building more momentum in the sector.

Upcoming budget needs to be more attractive to foreign investors as it will be an ultimate platform to announce further incentives: Ms Shraddha Kedia-Agarwal, Director, Transcon Developers

During the pandemic, the Government has recalibrated its approach towards remobilizing the economy and introduced various reforms to ensure adequate liquidity in the system such as keeping the interest rates low, additional liquidity support to NBFC and HFCs. RBI's accommodative stance for such a long duration too helped mitigate the effects of Covid-19 on businesses and was a key to the recovery of real estate and the overall economy. These reforms have eventually proven to be positive for the economy in the long run. The outlook on India's economic growth in the coming years looks very positive with the way the Government has tackled the crisis of the pandemic in the past two years.The upcoming budget needs to be more attractive to foreign investors as it will be an ultimate platform to announce further incentives which will attract more foreign investments into the sector.

Considering the rupee's recent muted performance, this budget is an ideal time for reforms targeted at foreign inflows into India. We expect the government to reduce the tax on interest income which will help accelerate capital inflows to India. Liberalizing foreign investment norms in real estate is another widely expected move.The residential real estate market in India has become more lucrative for NRIs as a result of the increased transparency due to RERA and ease in investment norms.

Given their efforts towards nation building, the NRIs expect the forthcoming Budget to reward them with sops such as ease of compliance under the Income-tax Act and reduction in withholding tax rates, among other relaxations.Real estate acts as a major growth driver for the Indian economy. The government must announce encouraging moves that can further attract foreign investments into the sector and help in huge employment generation.

Government needs to allocate more funds for Pradhan Mantri Awas Yojana: Mr Navin Makhija, Managing Director, The Wadhwa Group

The capping of Rs 45 lakh applicable for an affordable house should be extended to 60 lakhs. This would expand the benefits of affordable housing schemes to more home buyers and therefore boost the end-user demand. While incentives have been provided to boost the affordable housing segment, there needs to be a reduction in the cost of land, development premiums and tax, sops including lower intra rate to incentivize developers to build budget homes. Since the high cost of land is another major constraint faced by the sector, steps taken by the government to unlock the value of land parcels held by government agencies / PSUs through partnerships with affordable housing developers can be a significant step.

Such initiatives can also help the government to improve its revenue generation capability. The Government also needs to allocate more funds for Pradhan Mantri Awas Yojana (PMAY) which will help them achieve the target of ‘Housing for All’. Industry status for the sector and single window clearance for projects has been a long-standing demand which we expect the Government to address. Apart from this, we are expecting a more determined infrastructure push from the Government not only in the form of more funds but with strict guidelines on actual infra deployment. This will certainly boost the real estate sector and also generate more jobs that the Government has committed to deploy. We anticipate the Government to announce incentives that will propel the growth of the sector such as introducing tax breaks which will increase public spending, less transaction cost, etc.

Govt should consider expanding the SWAMIH Fund which will not only ensure completion of stressed projects but will also broaden the scope across property segments: Mr Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Treasurer, CREDAI-MCHI

The government should consider expanding the SWAMIH Fund which will not only ensure completion of stressed projects but will also broaden the scope across property segments and assist developers of stressed projects in delivering them on time too; to the home buyer. This will ultimately boost the confidence of the homebuyers.

The real estate sector is looking at continuation of a robust housing demand in 2023 and developers expect the government to play a more constructive and supportive role. A robust housing sector will complement infrastructure development and will be a catalyst to the growth of the economy as well.

We expect policies and reforms that will further boost the industry, like tax breaks, single-window clearance, encouragement of home purchase, and rationalization of GST for raw materials: Mr Ramesh Ranganathan, CEO, K Raheja Corp Homes

“Firstly, the Real Estate sector needs to be given industry status. We expect policies and reforms that will further boost the industry, like tax breaks, single-window clearance, encouragement of home purchase, and rationalization of GST for raw materials.With the Government's emphasis on Housing, home purchase needs to be incentivised through higher tax deductions. The residential property holding period needs to be revised downward from 36 months to 12 months, for qualification as a long-term capital asset. To ensure a seamless balance of supply and demand, promote ease of doing business and drive further investments into the industry, a single-window clearance system is the need of the hour. Intervention is also needed to rationalize GST rates for construction materials like steel and cement.”