INCREASED PMAY ALLOCATION TO BOOST AFFORDABLE HOUSING
The Union Budget 2023-24 makes a commitment towards green growth, while focusing on augmentation and enhancing urban infrastructure, technology, and inclusive development. At the same time, the budget throws open the doors for increased consumption and capital investment, to drive growth. The capital outlay for infrastructure at INR10 lakh crore, or 3.3% of GDP is significant as it can lead to multiplier effect across sectors and set a strong footing for a resilient growth. This includes aspects such as the urban infrastructure development fund at INR10,000 crore per annum. Dedicated investment of INR 10,000 cr through the urban infra development fund will result in creation of quality of urban infrastructure thereby improving quality of life. This will also translate into higher demand for housing and commercial real estate. For the real estate sector, the government has increased the allocation for Pradhan Mantri Awas Yojana by 66% to about INR79,000 crore. The increase in outlay will go a long way in bridging the gap between demand and stock in affordable housing. This will provide opportunities for associated stakeholders such as construction companies, contractors etc. Further, expected changes in income tax slabs will result in higher disposable incomes, boding well for prospective homebuyers, mainly in the affordable and mid segment. The announcement to set up of 100 labs for developing 5G service applications in India will give a boost to startups especially in the technology sector. This, along with continued focus on digitization can rekindle the IT sector, and spurring some activity in the commercial office space. We believe that the thrust on electric mobility is the need of the hour. The budget provided provisions related to battery production, investment in energy transition, will give a fillip to the EV industry in India. Between 2023-2027, the EV space in India is likely to see investments of INR94,000 crore (USD12.6 billion) across the automotive value chain. The government’s focus on creating more decentralized storage facilities for agricultural products can create more warehousing demand, especially on the cold storage front. This, along with the government’s disinvestment schemes can unlock immense value in the warehousing space.
Tags : PMAY Union Budget Ramesh Nair CEO India & MD Market Development Asia at Colliers