Union Budget 2024-25: A Mixed Bag for Indian Real Estate
The first Union Budget of Modi 3.0 focuses on MSMEs, employment, and infrastructure, with marginal benefits for the real estate sector.
Union Budget 2024 25Indian Real EstateInfrastructure DevelopmentAffordable HousingMsmesReal Estate PuneJul 23, 2024
The emphasis on rural and urban job creation is expected to boost affordable housing, which has seen a decline in sales since the pandemic. The Pradhan Mantri Awas Yojana (PMAY) Urban 2.0 aims to construct an additional one crore homes, with an outlay of INR 10 lakh crore. This move is expected to benefit the urban poor and middle class, who are in dire need of affordable housing options.
The mega allocation for the Hyderabad-Bengaluru industrial corridor and Vizag-Chennai corridor is expected to boost growth along these corridors, leading to increased real estate activity. The credit guarantee scheme for MSMEs will help provide impetus to overall industrial development, which in turn will have a positive impact on the real estate sector.
The budget's focus on MSMEs is crucial, as the sector has a multiplier effect on overall economic growth. The pandemic had a devastating impact on MSMEs, leading to a decline in affordable housing demand. With the economic impact of the pandemic subsiding, demand for affordable housing is expected to gain momentum.
Other highlights of the budget that are pertinent to real estate include the sanctioning of 12 industrial parks, rental housing with dormitory-type accommodation for industrial workers, and brownfield redevelopment of cities under the public-private partnership (PPP) mode. Additionally, the tourism boost to states like Odisha and Bihar is expected to have a positive impact on the real estate sector.
While the budget has provided some impetus to the real estate sector, individual taxpayers may not see a significant boost in demand, despite the increased standard deduction limit and new income tax slabs. Overall, the budget has provided a mixed bag of benefits for the real estate sector, with some positives and some missed opportunities.
Frequently Asked Questions
What is the allocation for infrastructure development in the Union Budget 2024-25?
The allocation for infrastructure development is over INR 11.11 lakh crore, nearly 3.4% of India's GDP.
What is the target of PMAY Urban 2.0?
The target of PMAY Urban 2.0 is to construct an additional one crore homes, with an outlay of INR 10 lakh crore.
How will the credit guarantee scheme for MSMEs benefit the real estate sector?
The credit guarantee scheme will provide impetus to overall industrial development, leading to a positive impact on the real estate sector.
What is the current share of affordable housing in the top 7 cities?
The current share of affordable housing in the top 7 cities is around 18%, down from nearly 40% in 2019.
What are some of the other highlights of the budget that are pertinent to real estate?
Some of the other highlights include the sanctioning of 12 industrial parks, rental housing with dormitory-type accommodation for industrial workers, and brownfield redevelopment of cities under the PPP mode.
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