New Delhi, February 1, 2022: Finance minister Nirmala Sitharaman’s focus on infrastructure and low-cost housing have made the Budget 2022 a positive for the real estate sector. In her Budget speech, the FM announced that 18 lakh homes would be completed in Fiscal 23 under the PMAY.
The FM also announced a 35.40 per cent hike in infra capex outlay to nearly Rs 7.5 lakh crore. Sitharaman then announced plans to enhance urban planning and capacity-building across several mega-cities. She informed that nearly 18 lakh houses will be completed for beneficiaries of PM Awas Yojna, for which Rs 48,000 crore would be allotted.
She added that the Union Government was committed to help cutting the red tape involved in building low-cost homes under the scheme, for which the central Government will work with State Governments for reduction of time required for approvals to promote affordable housing for the middle-class and economically weaker sections in urban areas.
Sitharaman said that a high-level committee of urban planners will be given the task of enhancing urban planning. She also added that five existing academic institutions would be designated as centres of excellence in urban planning with an endowment fund of Rs 250 crore each.
Sitharaman said tier-2 and tier-3 cities would also have to step up in terms of development. She further added that a high-level committee of urban planners will make recommendations of urban policy, capacity building, planning and governance.
The Finance Minister also suggested modernization of bylaws governing urban planning and central government support for mass-transit projects across cities.
Following are the reactions the Budget by industry stalwarts –
Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers
“The Union Budget 2022-23 is forward looking and focuses on a long-term plan for the country with digitization, urban development, and sustainability at its core. For the real estate sector, the budget placed an outlay of Rs 48,000 crores under the Pradhan Mantri Awas Yojana, and the construction of 80 lakh homes will facilitate affordable housing. This, yet again, showcases the government’s commitment on building affordable housing stock. However, we would have liked if there was more push on the demand side, such as the extension and expansion of the credit-linked subsidy scheme. The Budget made several announcements to spur growth of the logistics sector in the country.
Anurag Mathur, CEO, Savills India
“Direct real estate measures were focused on providing infrastructure status to Data Centres and allocating ₹48000 cr for 80 lakh houses under PMAY. However, there are long term gains wherein the focus on creating a broad-based platform for manufacturing and R&D should create newer avenues for investment and development. In addition, there was significant focus on urban capacity building, digitisation of land records and new proposed SEZ law that will enable states to partner in existing and new exclaves to enhance exports.”
“Industry welcomes much awaited focus to resolve long standing issues of reduction in approval timelines for land & construction. Emphasis laid towards modernisation and reforms in building byelaws, TDR reforms, urban town planning schemes, transit oriented multi modal corridors and transferable development rights. Impetus to urban development policy with enhanced capacity building will lead holistic development of urban cities. Focus on nurturing new smart tier 2-3 cities will result in a big boost for Real Estate infrastructure with cascading impact on additional job creation. Single window portal for green clearances is a step to promote ease of doing business in augmenting sustainable development along with special mobility zones for electric vehicles. Additional impetus on Gati Shakti, inclusive development for last mile connectivity, public investment, capital spending and financing of investments will augment steady economic growth.”
Ashish Bhutani, CEO, Bhutani Group
“Budget 2023 is definitely a futuristic budget with its focus on infrastructure, warehousing, logistics and urban planned development besides improving connectivity through Gati-Shakti masterplan for expressways. Further, we welcome the honourable Finance Minister’s announcement of the allocation of Rs 48000 crore for housing projects under the PM Housing Scheme. In a nutshell, all these initiatives will improve demand in the real estate sector in the long run while encouraging the thrust on tier-2 and 3 cities where revamped urban planning and design has been envisaged for capacity building.”
Dr. Nitesh Kumar MD & CEO Emami Realty Ltd.
” 25,000 kilometers of new highways will be added to the national highway network in 2022-23. Through technology, PM Gati Shakti will accelerate the implementation of development projects through the seven engines for multimodal connectivity for the states. With this budget, the Finance Minister tried to rejuvenate the MSMEs sector, which has a multiplier effect on the economy as a whole. The ECLGS scheme has been extended until March 2023 for MSMEs. This move will not only boost industrial development, it is likely to have a ripple effect on the real estate sector, as well, given that the pandemic had a catastrophic impact on this sector (MSMEs), and demand for affordable housing slowed in 2021.”
Soma Mondal, Chairperson, SAIL
“The budget envisages higher Public investment and capital spending by the Government. There is a direct focus on intensifying the infrastructure developmental activities through the PM Gati Shakti Programme with seven engines of growth, focus on Highways network, PM Awas Yojna in rural and urban areas, Har Ghar Nal Se Jal scheme, etc. The additional focus on the MSME sector will also trigger enhanced economic activities. These efforts are sure to have a positive impact on the overall economy and it augurs well for the steel sector.”
“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.
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
“The Union Budget 2022-23 was balanced and focused on overall nation’s economy and not just extending benefits to particular sectors. We believe that when all industries stay on the path of recovery and growth, sustenance gains strong ground and all industries get boosted equally. The focus on affordable housing and housing for all looked very strong in today’s budget. Allocation of 48,000 crore for PMAY will go a long way in helping people satisfy their basic need of owning a home. Another important aspect which was day’s highlight and we really appreciate as a developer who develops not just group housing but also townships, is the push on infrastructure and urban planning. Our long standing demand of industry status for the real estate sector remains unaddressed this year and we hope authorities look into it in the coming years.”
It was a balanced Budget that took care of the overall economic development, including improving multi-model transportation in cities and increasing the highways by 25000 km. The improvement in transportation will generate employment in cities, leading to a growth in demand for housing. The affordable segment will also benefit from the announcement of reduction of time for land and construction related approvals in urban areas which was earlier a matter of concern for the industry. The Government has also talked about tier II and III cities and that it will work with urban planners to ensure that these cities witness economic growth and employment.
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 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, urban planning etc. not just in metros but also to Tier II-III cities. The measure of setting up a high-level committee for urban planners and economists to be formed for recommendations on urban capacity building, planning implementation, and governance is a giant leap to introduce modern urban planning structures. Overall, the Union Budget 2022-23 had a mixed bag of announcements for the real estate sector, much was expected on the 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 Budget 22-23. We’ve been requesting industry status for the entire sector as well as single-window clearance to ensure smooth operations, but the government has yet to respond. Overall, Hon’ble FM’s budget announcements appear to be a mixed bag from a real estate standpoint. While the anticipated expansion of smaller cities and infrastructural improvements can be considered as favorable developments for the secto
Amit Modi, Director ABA Corp, President Elect, CREDAI Western UP
The sector had hoped for some tangible announcements like industry status and GST input tax credits for developers in this years Budget, but these did not happen. At the same time, we welcome Rs 48, 000 crore as allocation for PM Awas Yojana and identification of nearly 80 lakh households or the affordable housing scheme in 2022-23. Following a challenging year, it was critical to allocate resources to job creation and the strengthening of employment-creating industries, which the government has attempted to do, but 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 government’s 60 lakh job creation target and $5 trillion economy scale
Ajay Chaudhary, Chairman and Managing Director, Ace Group
“The budget presented by the honourable finance minister enflames a much promising future for the real estate industry with the much introspected PM Housing Scheme which accrues a huge allocation of Rs 48000 crore in FY-23 for housing projects apart from single-window green clearances. This move will help the real estate sector streamline the construction of affordable homes.”
Abhishek Bansal, Executive Director, Pacific Group
We congratulate the FM for coming up with a Budget with a focus on overall economic health; the announcement 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 after 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
Despite very high hopes, the budget so far has been a little disappointing for the Indian Real Estate industry. Meanwhile, nothing very concrete has been announced about real estate. However, there have been a couple of positive outcomes. Firstly GOI’s commitment to further develop urban infrastructure in a robust but sustainable fashion is a welcome step. Secondly, GOI 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. The Honorable Finance Minister during the budget session suggested the GST collection of over 140,000 Crores during JAN 2022, the highest after the implementation of the GST regime. The 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, IIT Alumni at Sushma Group
Indirectly, the real estate sector will benefit from 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 will focus and invest in tier II – III cities which will ease the liquidity and boost the sector, providing people with varied housing options; the 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 as the Government is moving towards ‘Housing for all’ by announcing the completion of 80 lakh houses under PMAY and allocation of Rs 48,000 crore under the PM Housing scheme. The Central Government will work with state govt for reduction of time for land and construction related approvals promoting affordable housing for middle class and economically weaker section in urban areas. We are sure that the work on the segment will speed up, and people will realize the dream of owning a home.
Vikas Garg, DMD, MRG World
We are happy that the focus of the Government is on providing affordable housing; the announcement to come up with 80 lakh houses under PMAY for urban and rural areas calls for a concerted effort of 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 further streamline the process and control the cost.
LC Mittal, Director, Motia Group
Improvement in transport infrastructure and 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 further lead to a uniform economic development creating real estate demand. We welcome the Budget as it is work towards overall growth of economy and reach the target of 8-8.5 per cent GDP growth as predicted in Economic Survey.
Rajan Bandelkar, President, NAREDCO on Union Budget
The establishment of a logistics network in the country will provide an impetus to the development of infrastructure in the country. It will positively affect the development of the housing sector in the country along the corridors. Moreover, the announcement by the government that it will work with the state govt for a reduction of time for land and construction-related approvals promoting affordable housing for the middle class and economically weaker sections in urban areas is laudable. The establishment of a high-level committee on the Urban Sector to drive modernisation of building bye Laws, TDR reforms, Transit-Oriented Reforms and sustainable development, including single-window green clearances will help the sector in the longer run.
Avneesh Sood, Director Eros Group
“We are excited that the Government has taken note of the Big private investment in infrastructure guided by Gati Shakti. The decision to work closely with financial institutions to expand access to capital and reduce the cost of intermediaries to promote affordable housing for the weaker sections of the society is a positive move. The proposal to extend 60,000 crores for providing access to tap water to 3.8 crore households and 80 lakh households for the affordable housing scheme is laudable and it shows that the government is serious about the recovery of the real estate sector which is affected heavily due to COVID-19 Pandemic”.
Aman Trehan Executive Director Trehan Iris
We are confident that the boost to the real estate sector provided by a high-level committee of urban planners and institutes charged with formulating policies for India’s sustainable urban development will usher in a prosperous period for the industry. We expect that as part of the rental housing changes, rental revenue for the first five years after completion will not be taxed in order to encourage people to rent. This will be a significant step toward boosting the buy-to-rent housing trend across the country.
Saransh Trehan, MD, Trehan Group
“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. May it be agriculture, infrastructure or any other sector, the budget has laid down a clear roadmap for New India and a prosperous Bharat”.
Suren Goyal, Partner, RPS Group
“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 growth of the economy”.
Aditya Kushwaha, CEO & Director, Axis Ecorp
The budget 2022 is growth-inducing and does the heavy lifting by sharply increasing capital expenditure. On the real estate aspect, the annual budget reinforces the Government’s focus on affordable housing. The government has also announced an outlay of Rs 20,000 crore toward Gati Shakti for integrated planning and coordinated implementation of infrastructure connectivity projects. In the budget 2022-23, there was also an emphasis on sustainable development with climate action being one of the central themes.
The Hon’ble Finance Minister also mentioned that the tier-2 and tier-3 cities would have to step up in terms of development. We were expecting the government to incentivise the secondary housing market but that has been left unaddressed. Another major concern area for the sector has been increasing prices of raw materials. Unfortunately, no relief in regards to this has been announced in the budget presentation.
Varun Gupta, Director, Ashiana Housing
Union Budget 2022-23 is pragmatic & progressive – especially with its increased focus on tier 2 and tier 3 cities for urban development.
The increased allocation to infrastructure and capital expenditure in this budget will catalyse urban development and economic growth. Also a high-level panel to be set up for urban planning is a great idea towards better quality development of our cities.
Vinit Dungarwal, Director, AMs Project Consultants Pvt. Ltd.
India is currently at the cusp of becoming the global data centre hub. We welcome the move to grant infrastructure status to data centres and believe that it is a step in the right direction. This move will facilitate the sector to avail long term and cheap credit and grow faster as we leapfrog to become a digital-first country.
It was expected that there will be a significant announcement pertaining to the affordable housing segment and the budget does not disappoint in that regard. The Hon’ble FM announced Rs 48,000 crore towards the Affordable Housing Scheme (PMAY). It was also announced that the NH Motorway network will be expanded by 25,000 km in 2022-23 and for that, the government will be mobilising Rs. 20,000 crore to complement public resources. The enhanced spending on public infrastructure projects along with enhancing the road network is laudable as it will give impetus to the employment generation and facilitate faster economic revival.
Harshwardhan Prasad, CEO Tribeca Developers
”The overall budget is positive which will act as a catalyst to many other industries. This will fuel growth and therefore indirectly help the real estate sector. In India, the real estate industry is among the key pillars of the economy. And though the 2022-23 budget identified 80 lakh households for the affordable housing scheme which has been extended by 1 year, we were expecting additional developments. We will wait for all details before we can comment further.”
Deepan Garg, Director, Ruchira Green Earth
“Union Budget 2022-23 has given the much needed boost to EV industry with the upcoming policy on battery swapping. The policy will help drive the wide-scale adoption of EV batteries while it will also reduce the upfront ownership cost of EVs. The government’s intention to develop special mobility zones for electric vehicles is another encouraging move for the industry. Moreover, the creation of Zero emission zones in the cities will further help drive demand for electric vehicles and EV batteries. ”
Rizwan Sajan, Founder and Chairman, Danube Group
“Budget 2022-23 has the provisions for the modernisation and upgradation of the country’s infrastructure that will fuel more demand in the real estate sector which is expected to reach US$ 1 trillion in market size by 2030.”
Farshid Cooper, MD, Spenta Corporation
“Budget 2022-23 is being looked at quite the booster for the infrastructure industry with focus on PM Gati Shakti National Master Plan for Multi-Modal Connectivity aimed at coordinated planning and execution of infrastructure projects mainly by bringing down the logistics costs. This will surely help the PPP model to emerge and provide employment and real estate development in smaller areas. While the budget has kept its long term goal of all inclusive growth at the heart of the budget, the real estate industry was hoping for some personal tax and home loans related announcements that would have benefitted the potential homebuyers and in turn the sector.”
Sanjiv Mehta, President, FICCI
“We compliment the Finance Minister for presenting a forward-looking and growth-oriented budget that strengthens the drivers of long-term development. It builds on last year’s budget and scores high on several counts – consistency, capex led growth, transparency in numbers, energizing many of the stressed sectors and continues the focus on simplifying the taxation policy. FICCI is pleased with the set of announcements that were made today, and we look forward to the implementation of the same by the central government in close coordination with the states.”
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