New Delhi, Mar 06, 2015
Like every other sectors, there has been a lot of euphoria associated with the upcoming Union Budget, with the expectations that surely will be some major announcements by the Finance Minister (FM) to boost the Indian realty sector. Though contrary to the beliefs, there has not been any direct announcement for the Indian realty market. Nevertheless, there has been some key areas captured, which has the potential to sculpture the sector in the near future.
Here in the post of mine, I will touch some of these key areas, which the Union Budget has announced and how will it stimulate the coordinates of the realty industry in the coming time.
Affordable Housing
The budget stipulates to develop 6 crores new houses under the affordable housing category, comprising of 2 crores urban and 4 crores rural housings. This will not only fill the huge existing gap in the Indian housing landscape but will also result in a huge boom to the Indian housing industry. It will also entice many category A players to venture into the affordable housing market segment.
Infrastructure
The realty industry is intertwined with the infrastructure sector. The budget has good news for the Indian infrastructure in the form of allocation of INR 70,000 crores for the development roads and railways, allocation of INR 4,173 crores for the development of water resources and development of 6 crores public toilets under the Swachch Bharat Abhiyan’.
An emphasis in infrastructure will enhance the realty sector through multiple ways. It will boost the economy and create new jobs thereby stimulating the residential, commercial, retail and other realty market. Likewise development of road and other infrastructure will also translate into heightened purchase appetite as properties near the vicinity of infrastructure development are supposed to intercept higher appreciation in the coming time.
Curbing Black Money
One very positive aspect of the Union Budget has been the announcements of some of the key steps to curb the growing influence of the black money. The prohibition of cash over INR 20,000 for any transaction is a great step to control the influence black money in the Indian realty market, thereby ensuring a more safe future for the industry in the coming time.
The Downside
One of the disappointments in the budget was the exclusion of the 100 smart cities in the plan. Ever since the government has come to power, there has been a lot of hoopla about building an extensive network of smart cities, thereby giving a great boost to infrastructure and urban housing. However the given budget has not discussed anything on the same.
Other negative news has been the rise in service tax. In my previous opinion I have explained that how change in taxation policy can stimulate the investment intent of the end user . An increase in service tax might have some downside effect on the purchasing capacity of the users.
In a nutshell it could be concluded that the budget has been a mixed bag. Though it was surely devoid of big announcements, there have been few significant blessings in disguise that if realized fully, can make a strong imprint of the growth trajectory of the Indian realty industry.
To know more about how the Union Budget is going to impact the realty industry, stay tuned to our blogging platform. In the given week our research team will be compiling and publish a range of reports, highlighting the impact of budget on the various big and small dimension of Indian realty market.
Mr. Manik Kinra is the CEO of Kin Housing, one of the fastest growing property investment advisory.
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