Budget reaction from Dr Niranjan Hiranandani, Chairman, NAREDCO & Hiranandani Group, on Union Budget 2025

Real Estate & Infrastructure Industry Perspective

New Delhi, February 01, 2025: From the vantage point of the real estate and infrastructure sectors, the Budget FY26 sets the stage for transformative growth.

Central to this budget is its unwavering focus on infrastructure enhancements. Notably, it incentivizes the purchase of a second flat, encouraging real estate investments. Moreover, the introduction of SWAMIH Fund 2.0 seeks to alleviate the burden on constrained homebuyers by delivering stalled projects, while the hike in TDS on rentals up to ₹6 lakhs promises to bolster rental investments. By expediting mergers and acquisitions, the budget aims to initiate new real estate projects under innovative business models. Additionally, addressing the skill gap through the establishment of new centers of excellence will help bridge the widening talent chasm. However, the concern over inadequate long-term investment allocation remains a hindrance for achieving the ambitious Viksit Bharat growth targets.

The middle class, a crucial driver of demand, stands to benefit immensely from tax incentives that translate their aspirations for an improved quality of life into tangible home-buying prospects. This is expected to generate a positive demand curve in the real estate sector. Banks have reported a notable 40% increase in retail home loan portfolios post-COVID, and the anticipated reduction in home loan interest rates will further fuel this sustained demand. Emerging growth corridors featuring new projects with integrated amenities are poised to attract even more buyers.

The budget also shines a spotlight on labor-intensive sectors to ensure that quality, productivity, and competitiveness are enhanced, positioning India as a formidable global player. A strategic highlight is the finance minister’s announcement of a ₹1 lakh crore Urban Challenge Fund. This fund aims to address land and development obstacles, foster robust social infrastructure in key urban centers, and drive infrastructure development across urban corridors. The focus on new airports, shipping ports, and inland waterways is set to transform India into a competitive logistics hub, reducing product costs and boosting economic efficiency.

However, it is worth noting that the budget has not taken significant action towards uplifting affordable housing, a segment crucial for inclusive growth and economic stability.

In summary, the Budget FY26 is a forward-thinking document that lays a comprehensive foundation for growth, though certain areas like long-term investment and affordable housing require further attention to fully realize the vision of a prosperous and developed Bharat.