Budget BYTES February 2022

Amish Mehta, MD & CEO, CRISIL

The 25% increase in the central budget for capital expenditure and substantially higher allocation to states for the same purpose, will have an incipient multiplier effect. By focusing on infrastructure creation, the budget not only paves the way for   the upside to growth but also creates conditions for an early and sustainable pick up in private sector investments. The expansion and extension of CLGS scheme for MSMEs and increased allocation for PMAY, will generate employment and instead bolster private investment.

Pradeep Aggarwal, Chairman, Signature Global & Chairman, Assocham National Council on Real Estate, Housing & Urban Development, ” 

In line with the government’s policy to boost affordable housing, the budget has made provision for R 48000 crore for affordable housing under PMAY to create 80 lakh homes. The increased push to highways with a high target of 25000 km and improved multimodal transportation in cities, will lead to an increase in housing demand. The affordable housing segment will   benefit from the faster approvals for land and construction. It will further get a boost with the government’s plan to focus on tier 2-3 cities. Expanding access of capital and reducing cost of intermediaries, will provide greater access to funds to finish projects on time 

Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com

The budget has announced a variety of measures that would go a long way in meeting the twin targets of creating jobs and boosting economy. The provision of Rs. 48000 crore under Prime Minister Awas Yojana for completion of 80 lakh houses will help the government in achieving its target of Housing for All. The government’s proposal to cut down the approval time related to land and construction will bring ease of doing business. The real estate sector will also be benefitted from announcements related to industrial & logistics and data centers, enabling them to aggressively diversify into these two upcoming asset classes in the overall real estate sector. A lot of emphasis has also been given on better land record management.
However, the industry did expect some tweaks in tax slab, a move that would have resulted in greater savings for people, which would have consequently boosted consumption, especially in the real estate sector. The Budget has also been largely mute on any direct support for the housing sector.

Manoj Gaur, CMD, Gaurs Group and Vice-President, North, CREDAI National

It is a balanced and focused budget for overall growth of economy.  There is strong focus on affordable housing and housing for all . The allocation of Rs 48,000 crore for PMAY will go a long way in helping people meet their basic need of owning a home. Another important aspect of the budget is the push on infrastructure and urban planning and capacity building.  Our long-standing demand of industry status for the real estate sector however remains unaddressed.

Amarjit Bakshi, CMD Central Park

We anticipated a budget that is both people and business-friendly; the current budget made it clear that economic growth is the prime focus as the Economic Survey projected a GDP growth of 8-8.5 per cent in the next fiscal. The emphasis on improving transport infrastructure, including highways, will go a long way in creating sustainable pockets of real estate development. Though there was no specific announcement related to the sector, we are hopeful that job creation and the announcement of Ease of Doing Business 2.0 will lead to increased demand.

Uddhav Poddar, MD, Bhumika Group

This year’s budget focus was more on boosting the overall infrastructure and urban planning, not just in metros but also in Tier II-III cities.  Overall, the Union Budget 2022-23 had a mixed bag of announcements for the real estate sector; much was expected in terms of single window clearance, industry status and tax incentives which did not come through.

Nayan Raheja, Raheja Developers

The real estate sector’s long-standing demand has not been addressed in the budget. We’ve been requesting industry status for the entire sector as well as single-window clearance to ensure smooth operations, but the government is yet to respond to this. However, the anticipated expansion of smaller cities and infrastructural improvements can be considered as favorable developments for the sector

Saransh Trehan, MD, Trehan Group

The Finance Minister Nirmala Sitharaman’s historic budget is an optimal blend of optimism and realism which will take the country to a higher growth trajectory. Be it infrastructure, affordable housing or any other sector, the budget has laid down a clear roadmap for economic growth for new and prosperous India.

Suren Goyal, Partner, RPS Group

Finance Minister Nirmala Sitharaman has pulled all the right strings in her budget. The emphasis on the infrastructure sector will boost growth in the medium to long term and will help the country in maintaining its position as the fastest growing major economy in the world. Revamping of SEZ Act will also assist in the overall growth.

R K Arora, Chairman, Supertech Ltd

The government has treaded a line of fine balance to lead the economy to high GDP growth rate by investing in infrastructure sector, yet keeping the fiscal deficit within manageable limits. In the backdrop of ambitious ‘Housing for All’, PMAY has been given due importance, largely through government’s flagship programmes rather than through the incentives which real estate development companies were hoping for.

Amit Modi, Director ABA Corp, President Elect, CREDAI Western UP

The budget missed out real estate sector specific  tangible announcements like industry status and GST input tax credits for developers ,though the allocation of Rs 48, 000 crore for PMAY for affordable housing is a welcome move .Real estate sector being one of the largest employers in the country had hoped for more fiscal and policy support to not only bounce back from the pandemic induced slowdown, but also be a sizeable contributor to governments 60 lakh job creation target and $5 trillion economy .

Abhishek Bansal, Executive Director, Pacific Group

With a focus on overall economic health; the budget announcements will lead to better-earning opportunities for people ,directly impacting the retail sector. We can see the retail and commercial segment moving to more Indian cities as infrastructure will improve following various announcements in the budget. Though there was not much in terms of tax savings for people, overall economic growth will lead to increased income that will support retail consumption.

Ankit Kansal Founder and MD, 360 Realtors

Though nothing very concrete has been announced about real estate, yet there have been a couple of positive outcomes. The government’s commitment to further develop urban infrastructure in a robust and sustainable way is a welcome step. Secondly, The government has rationalized custom duties for a host of steel products including steel scarp for secondary steel producers. Lowering steel prices might be helpful in optimizing input costs. Further, the record spike in GST collection resonates with a healthy economic outlook, which will drive demand for real estate. Meanwhile, the government has also extended one more year for availing tax benefits for newly incorporated manufacturing units. This might help drive demand for industrial lands, warehouses, and commercial assets.

Prateek Mittal, Executive Director,  Sushma Group

Indirectly, the real estate sector will benefit from the budget focusing on infrastructure, innovation, and job growth. The government also talked about urban development, where it will nurture the megacities as centres of economic growth and  focus on tier II-III cities to develop a sustainable growth environment. We foresee an influx of financial Institutions focusing  and investing in tier II – III cities which will ease the liquidity and  boost the sector, providing people with varied housing options.The real estate players already working in these areas will benefit from the first-mover advantage and their working experience in these regions.

Sanjay Sharma, Director,SKA Group

As expected, affordable housing was once again the focus area of the government which was clearly evident from the allocation of Rs 48000 crore towards ‘Housing for all’  The announcement about the central government working with state governments for reducing  time for land and construction related approvals ,will help promote affordable housing, enabling the middle class and economically weaker sections in urban areas to realize their  dream of owning a home.

Vikas Garg, DMD, MRG World

The government’s focus on affordable housing and a housing for all the announcement to calls for a concerted effort of the government and the developers. The focus on improving transport will definitely help develop affordable houses, which is a precondition of the buyers. The government has also said that it will work with the financial sector to reduce the cost of intermediaries, which will ensure affordability of homes.

Aman Sharma, Director Spaze Group

One step to encourage people to buy homes is to improve the economy, and Budget 22-23 has done everything required to kick start a healthy economic growth. Improved transportation and expansion of highways will lead to more demand for commercial real estate. The  support to startups and MSMEs will create an environment boosting demand for more office spaces, even in Tier II-II1 cities.

LC Mittal, Director, Motia Group

Improvement in transport infrastructure together with boost to highways, will go a long way in making people move to smaller cities.The announcement regarding developing a sustainable growth environment for these cities will not only create real estate demand but also lead to  uniform economic development.We welcome the

Nirmala Sitharaman, Union Finance Minister

The budget for 2022-23 is a budget for continuity and brings a policy of steadiness and predictability. It seeks to increase private investment, incentivise the use of technology and boost measures announced in the last year’s budget Last year, a number of policy announcements such as widespread privatisation of the sectors for the first time, were made as we needed to bring in equity capital through privatisation. All such aspects have been continued in this year’s budget. There should be a policy of steadiness and predictability which his budget brings.

This is a budget for sustaining the stimulus that has been given. We want to honestly undertake public investments in asset creation and public infrastructure expenditure. We feel that it is only through this that there will be a crowding of private investment. In line with this, the budget raises capital expenditure from Rs 5.5 trillion to Rs 7.5 trillion.

Ajay Piramal, Chairman, Piramal Group

The budget outlines a long-term growth, with public capital expenditure and financial prudence, especially making provisions for infrastructure and MSMEs.It seeks to address the supply-demand mismatches by increasing allocation for PLI schemes and incentives for startups. There is a strong thrust on digital which augurs well to not only position India as a favourable destination for global investors but also tap the potential of semi urban and rural markets.