As the Government of India is preparing to present the interim Union Budget for the fiscal year 2024-25, the Real Estate and Infrastructure sectors are keenly anticipating policy measures that can provide a boost to their growth and address the challenges they face. The real estate sector has been grappling with issues such as liquidity constraints, delayed projects, and subdued demand. Stakeholders in the industry are hopeful that the budget will introduce measures to ease liquidity, possibly through financial incentives or relaxations in financing norms, to stimulate construction activity and revive the housing market.
The housing demand in India is expected to be driven by affordable housing sector. It will be a great impetus to the sector if the government announces extension of PMAY program. The current PMAY covers only the houses sanctioned till March 2022. However, the increasing urbanization requires the program to increase its coverage. PMAY has proven track record of not only addressing the ‘Housing for All’ issue but also leaving a direct positive impact on livelihood betterment, enterprise development, social equity and gender empowerment. The sector eagerly looks for extension on PMAY 2.0 for another 5 years.
To boost non-housing sector of real-estate, initiatives can be announced to formalize investment in GOI approved MSM-REIT. Tax incentive for investors of MSM-REIT during initial five years can be proposed, this will help in formalizing investment and boosting non housing real estate sector.
In the infrastructure sector, there is an expectation for increased allocation of funds to support ambitious projects aimed at enhancing connectivity, such as the development of highways, railways, and airports. The sector also anticipates reforms that streamline regulatory processes, making it easier for projects to navigate approvals and timelines. Additionally, a push towards sustainable and green infrastructure is expected, aligning with global trends and environmental concerns. By incentivizing eco-friendly practices and renewable energy integration into infrastructure projects, the budget can contribute to India's commitment to sustainability.
Furthermore, both sectors are looking for more robustness in RERA and GST. A consistent and transparent regulatory environment will instill confidence among investors and developers, fostering a conducive atmosphere for growth. Overall, the Real Estate and Infrastructure sectors are optimistic that the Union Budget 2024-25 will offer strategic interventions to address their concerns, facilitate growth, and contribute to the broader economic recovery in the post-pandemic landscape.
