2023 Union Budget Reactions

2023 Union Budget: The real estate industry’s reaction to the Budget

Finance Minister just announced a 66% upsurge in the Pradhan Mantri Aawas Yojana (PMAY) outlay to Rs 79,000 crore . This might broaden the economic advantages of affordable housing programs to even more home buyers, growing end-user demand. Whereas incentives have indeed been offered to enhance the affordable housing portion, there needs to be a reduction in the price of land, development premium costs, and tax deductions, in addition to standard operating procedures such as lower intra-rate financing, to incentivize developers to construct budget housing units. Because the high cost of land is another major constraint that the sector faces, measures government has taken to reveal the significance of land parcels held by federal agencies / PSUs via partnership agreements with affordable housing developers can be substantial.

Such proposals can also assist the government in increasing its revenue generation capacity. The government should also increase funding for the Pradhan Mantri Awas Yojana (PMAY), which will aid in the achievement of the ‘Housing for All’ goal. We expect the government to address the long-standing demand for industry status and single-window clearance for projects. 

Here’s what experts and industry insiders think about this year’s Budget.


According to Atul Goel, Director, Goel Ganga Group, “The Indian real estate was looking forward to the upcoming budget, as a slew of policy overhauls and regulatory impetus were expected. In this regard, nothing has been announced and this is a little disappointing. However, the silver line is the government’s push toward urban development and infrastructure growth through increased capital investments. The overall Capex for the given fiscal has been increased to INR 10 lakh Crores, close to 3.3% of the total GDP. This will give a huge push to physical infrastructures such as highways & roadways, railway corridors, urban corridors, industrial clusters, aviation, etc. This can have a multiplier effect on the overall economy, job creation, expansion in the entrepreneurial ecosystems, and a general surge in income levels. The positive ramification of such a gigantic shift won’t just be restricted to housing but also commercial, warehouse, retail and other categories of Indian real estate. The government has also increased the allocation for PM Awas Yojna, which is a laudable step.”
Gurmit Singh Arora, National President, Indian Plumbing Association
,further added “GOI’s commitment to continuing top-class urban and rural infrastructure development in the form of higher capital investments and dedicated urban infrastructure funds also entails windfall for Indian plumbing and other related industries. The total capital expenditure will be INR 13.7 lakh Crores forming 4.5% of the overall GDP. This will translate into increased investment inflow into roadways, construction, water supplies, urban growth, logistics, etc. This in turn will drive demand for plumbing, pipelines, fittings, etc. Meanwhile, GOI has also announced to increase in the outlay towards PM Awas Yojna to INR 79,000 Crores. The thrust towards affordable housing projects will also unlock new opportunities for the plumbing businesses in India.”

According to Nakul Mathur, MD, Avanta India, “In the union budget, GOI has once reiterated its commitment to infrastructure development, urban growth, and the housing for all program. The effective capital expenditure will be INR 13.7 lakh Crores, forming 4.5% of the GDP. Likewise, the outlay for PM Aawas Yojna has been increased by 66% to INR 79,000 Crores. The thrust towards infrastructure development in the form of roadways, power, healthcare, railway corridors, water supplies, affordable housing programs, etc. will drive economic growth. This in turn will push demand for housing, urban communities, construction activities, office spaces, etc.”

Subhash Goel, Managing Director of Goel Ganga Developments also added that “The Budget session is the extension of GOI’s overall commitment towards infrastructure growth, spurred urbanization, and affordable housing projects. This will be beneficial to the real estate industry, as it will set the tone for increased growth and demand. The government has allocated INR 10,000 Crore in infrastructure funds that will be managed by National Housing Board (NHB). The fund will boost infrastructure in Tier 2 and 3 cities and drive housing demand. The overall capital expenditure has been raised to INR 10 lakh Crores, almost three times than in 2019. Capital expenditure is an important cog in the wheel of economic prosperity and growth. This will also create more jobs and real estate demand. The government has also increased fund allocation for PM Awas Yojna, which will help in the mission towards providing housing for all in India.”

“The union budget so far has not announced any real estate-specific policy, which is a little disappointing for the Industry players. However, the industry will welcome the government’s continued policy of supporting infrastructure growth. 10,000 Crore has been allocated for infrastructure funds which will also offer an institutional framework for development in Tier 2 and 3 cities. This will drive real estate growth. Meanwhile, the capital expenditure has been increased to INR 10 lakh crores which will link infrastructure growth, economic prosperity, and real estate demand. It is noteworthy that infrastructure development is the cornerstone of a healthy real estate industry.  The outlay for PM Awas Yojna has been increased by 66% to INR 79,000 Crores, which is another very prudent announcement”, said Siddharth Maurya, Resource Specialist, Expertise Real-Estate and Fund Management.

Subhash Goel, Director of Goel Ganga Developments
 
The Budget session is the extension of GOI’s overall commitment towards infrastructure growth, spurred urbanization, and affordable housing projects. This will be beneficial to the real estate industry, as it will set the tone for increased growth and demand. The government has allocated INR 10,000 Crore in infrastructure funds that will be managed by National Housing Board (NHB). The fund will boost infrastructure in Tier 2 and 3 cities and drive housing demand. The overall capital expenditure has been raised to INR 10 lakh Crores, almost three times than in 2019. Capital expenditure is an important cog in the wheel of economic prosperity and growth. This will also create more jobs and real estate demand. The government has also increased fund allocation for PM Awas Yojna, which will help in the mission towards providing housing for all in India.
 
Gurmit Singh Arora, National President, Indian Plumbing Association
 
GOI’s commitment to continuing top-class urban and rural infrastructure development in the form of higher capital investments and dedicated urban infrastructure funds also entails windfall for Indian plumbing and other related industries. The total capital expenditure will be INR 13.7 lakh Crores forming 4.5% of the overall GDP. This will translate into increased investment inflow into roadways, construction, water supplies, urban growth, logistics, etc. This in turn will drive demand for plumbing, pipelines, fittings, etc. Meanwhile, GOI has also announced to increase in the outlay towards PM Awas Yojna to INR 79,000 Crores. The thrust towards affordable housing projects will also unlock new opportunities for the plumbing businesses in India.
 
Nakul Mathur, MD, Avanta India
 
In the union budget, GOI has once reiterated its commitment to infrastructure development, urban growth, and the housing for all program. The effective capital expenditure will be INR 13.7 lakh Crores, forming 4.5% of the GDP. Likewise, the outlay for PM Aawas Yojna has been increased by 66% to INR 79,000 Crores. The thrust towards infrastructure development in the form of roadways, power, healthcare, railway corridors, water supplies, affordable housing programs, etc. will drive economic growth. This in turn will push demand for housing, urban communities, construction activities, office spaces, etc.
 
Siddharth Maurya, Resource Specialist, Expertise Real-Estate and Fund Management.
 
The union budget so far has not announced any real estate-specific policy, which is a little disappointing for the Industry players. However, the industry will welcome the government’s continued policy of supporting infrastructure growth. 10,000 Crore has been allocated for infrastructure funds which will also offer an institutional framework for development in Tier 2 and 3 cities. This will drive real estate growth. Meanwhile, the capital expenditure has been increased to INR 10 lakh crores which will link infrastructure growth, economic prosperity, and real estate demand. It is noteworthy that infrastructure development is the cornerstone of a healthy real estate industry.  The outlay for PM Awas Yojna has been increased by 66% to INR 79,000 Crores, which is another very prudent announcement.
 
Atul Goel, MD, Goel Ganga Group:
 
The Indian real estate was looking forward to the upcoming budget, as a slew of policy overhauls and regulatory impetus were expected. In this regard, nothing has been announced and this is a little disappointing. However, the silver line is the government’s push toward urban development and infrastructure growth through increased capital investments. The overall Capex for the given fiscal has been increased to INR 10 lakh Crores, close to 3.3% of the total GDP. This will give a huge push to physical infrastructures such as highways & roadways, railway corridors, urban corridors, industrial clusters, aviation, etc. This can have a multiplier effect on the overall economy, job creation, expansion in the entrepreneurial ecosystems, and a general surge in income levels. The positive ramification of such a gigantic shift won’t just be restricted to housing but also commercial, warehouse, retail and other categories of Indian real estate. The government has also increased the allocation for PM Awas Yojna, which is a laudable step.
 
Mr. Shailesh Kumar, Founder of CABT Logistics. 
 
“The budget has taken into account the need for infrastructure development and increased connectivity in India. Investments in infrastructure in productive capacity have a large impact on growth and employment. The budget takes the lead in ramping up the virtuous cycle of investment and job creation. The Capital investment outlay is being increased to 10 lakh crores which would be 3.3% of GDP. One of the major highlights is the extended support to state governments for capital investment. The 50 years interest-free loan to the state governments will be extended for 1 more year to spur investment in infrastructure and incentivize them for complementary policies and actions with a significantly enhanced outlay of 1.3 lakh crore. The newly established infrastructure finance secretariat will assist all stakeholders in investment in railways, roads, urban infrastructure, etc which are predominantly dependent on public resources. This will ensure increased intra-city connectivity, thus paving the way for better logistics. A capital outlay of 2.40 lakh crores has been provided for the railways which will ultimately aid in connectivity even to remote areas. 100 critical transport infrastructure project for last and first-mile connectivity for food grains sectors, steel, fertilizer, etc has been identified. 50 additional airports, heliports, and advanced landing grounds will be revived for improving regional air connectivity. So this investment towards transit-oriented development will help the logistics sector as well.”
 
Mr. Vishal Jain, Co-Founder of Roadcast Technology funded by Jubilant Foodworks. 
 
“We are really happy with the budget because it takes into consideration sustainable and green growth. Especially the pro-EV outlook which will ensure that there are more electric vehicles on road. The reduction of customs duty from 21% to 13% on Lithium Batteries and an extension of the subsidies on EV batteries for one more year, will incentivize propel to invest in EVs. This in turn will help logistics and vehicle connectivity grow. Besides this, incentives for infrastructure development and inter-city connectivity with budget allocation for railways, and 50 additional airports, increased roadway connectivity and enhanced urban planning will towards transit-oriented development is key for the growth of logistics and we look forward to these beneficial schemes.”
 

Commenting on the budget 2023,  Dr. Payal Kanodia, Trustee, M3M Foundation said:

“The budget for this year is very encouraging, with a focus on inclusive development, green growth, and youth power. The announcements in various fields, such as tax relief, education improvements, and focus research and development, are encouraging. The increase in allocation for school education from Rs 63,449 crore (Budget Estimate) in 2022-23 to Rs 68,804 crore in 2023-24 is a welcome step for the education sector. The availability of the National Digital Library to children will greatly benefit the children. A strong focus on youth skill development will assist industries to attract young talent. Another significant development is the establishment of 30 Skill India International Centres across various states to prepare youth for international opportunities. We heartily welcome the ‘Mahila Samman Saving Certificate’ for women with a fixed interest rate of 7.5 per cent, for over a period of two years. This will definitely lead to shaping India into a stronger and growing economy in the future.

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