Budget 2019: Affirmative from a Real Estate perspective

Budget 2019: Affirmative from a Real Estate perspective

Mr. Amit Gossain, MD of KONE India and Chairman of Real Estate & Building Technology, CII

By Mr. Amit Gossain

With Budget 2019, the Government, it seems, has set a broad tone for future development drawn in the framework of economic growth, strengthening connectivity infrastructure, capital infusion, sustaining fiscal prudence, jobs creation, boosting foreign investments and harnessing India’s spaceabilities for $5 trillion economy by 2025. With a thrust on Digital Economy, connectivity, Rural development, Education and Infrastructure, ease of doing Business, incentives to Boost Investments, Disinvestment targets, enhancing ease of Direct and Indirect Taxation, Budget 2019 delivered on the expected lines.

Reiterating its aspiration to create a New India, the Government’s thrust on alleviating the stress on the Housing Sector, finalization of modern tenancy to promote rental housing,  increase demand for low-cost housing units, FIIs & FPIs investment in debt securities issued by NBFCs as a default cushion, implification of GST for NBFC sector and, capital boost to PSU Banks will provide the necessary impetus to Real Estate and Construction, which is the second largest employer and one of the largest sector in the country. 1.95 crore houses will be constructed under Pradhan Mantri Awas Yojana (PMAY) from FY20-22 and the time for completion of houses under the scheme has been reduced from 314 days in 2015-16 to 114 in 2017-18.

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From a Real Estate perspective, I find the Budget affirmative! Budgetary outlays will encourage the buyers with investible surplus to purchase houses and make a comeback in the market. Creating a physical and social infrastructure to provide ease of living, requires combined and intensive efforts from all stakeholders involved, such as Construction material, Elevators, Fixtures & fittings, etc.

I expect the Real Estate and Construction Sector to rise in response to the changes such as, grant of INR 100 lakh cr investment for infrastructure over the next 5 years, housing finance companies regulated by RBI, over 81 Lakh houses with investment of about INR 4.83 Lakh Cr sanctioned under PMAY (Urban) and Public Sector Banks proposed to be further provided INR 70,000 cr of capital to boost credit. From Tax initiatives to Incentivize affordable housing, increasing the carpet area, arranging GST cuts, credit linked subsidy and re-defining income definitions, the Government has been consistent with its efforts in addressing affordable housing to achieve the PM’s mission of ‘Housing for All by 2022’.

To say the least, Budget 2019 seems to be a positive and populist budget, and should be an encouraging contributor to grow the Indian Economy with the Government’s mantra for the NEW INDIA to ‘Reform, Perform, Transform’.

(The author of this article is the MD of KONE India and Chairman of Real Estate & Building Technology, CII)