Hits & Misses of Budget for the Real Estate Industry

During the pandemic, the various sector of the economy negatively affected significantly, and the real estate sector is not the exception. Therefore, investors expect a number of positive announcements in the union budget 2021 -22 for the real estate sector which is recognized as the second largest employment-generating sector in India (after agriculture).

A number of announcements had made on the logistic network and the infrastructure projects throughout the country in the union budget 2021-22 which surely affect the real estate industry positively. Although a number of good things for the real estate sector are announced in the union budget 2021-22 there are also some misses.

In this blog, we will discuss the hits and misses of the union budget 2021-22 for the real estate sector in detail.

Hits for the Real Estate Sector Announced in Union Budget 2021-22

Finance Minister Nirmala Sitharaman had announced a number of positive things in the union budget 2021-22 which can significantly boost the real estate industry, such as –

1. The affordable housing sector receives a major announcement in the union budget 2021-22. An allocation of Rs 48,000 crores had announced for affordable housing under the PMAY scheme.
2.  It is announced that 80 lakhs houses will be completed both in rural and urban areas under PMAY.
3. In the union budget 2021-22 it is announced that the PMAY scheme will be extended up to the year 2024 which positively affects the real estate sector.
4. The Finance Minister had announced that the central government will work with the state government to make it easier to get approvals for land and construction-related matters which in turn positively affect the real estate sector. Because it will reduce the time of getting land and construction-related approvals and finally helps in the timely completion of the real estate project.
5. The announcement regarding Production Linked Incentive (PLI) scheme will also positively influence the real estate industry of India.
6. The revocation of Countervailing Duty and Anti-dumping duty on stainless steel, coated steel, bars of alloy steel, and high-speed steel may promote the real estate sector because it will help to reduce the cost of steel which is an important element of construction.
7. The union budget 2021-22 focuses on urban planning and development, especially on Tier 2 and 3 cities and this will promote the real estate industry in the country.
8. The union budget 2021-22 may be considered as an infrastructure development budget. Focuses is given on the expansion of Roads, Railways, Airport, Ports, Mass Transport, Waterways, logistic Infrastructure, etc. to improve the overall status of connectivity and this will surely also promote the real estate industry.
9. In the union budget 2021-22 Rs 50,000 crores was allocated for the Jal Jeevan Mission and this will improve the infrastructure and as well as positively affect the real estate sector.

Misses for the Real Estate Sector Announced in Union Budget 2021-22

Although the real estate sector already shows a number of signs of turn back from the bad times of the pandemic covid – 19 the union budget announcement 2021-22 fail to meet a number of demands of this sector which may further boost the sector, such as –

1. The real estate sector is not given the long-awaited demand of this sector i.e. industry status in the union budget 2021-22 which may boost the industry a lot.
2. The sector expected a number of special tax reliefs following the covid-19 pandemic but this is not fulfilled in the union budget announcement 2021-22.
3. GST
4. There is no special announcement for various real estate companies which expect incentives from the union budget 2021-22.
5. Special deduction on interests/principal is expected on a home loan but is not fulfilled.
6. The demand for single window clearance for the real estate industry is not still announced in the union budget 2021-22.

Conclusion

Although there are some hits and misses in the union budget 2021-22 the overall status of the budget is considered as real estate friendly. We can expect that this budget announcement will boost the real estate industry significantly.

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