How TheNew Budget Shapes the Future of Real Estate Sector

The Union Bill for the fiscal year 2023-2024 was recently announced by Finance Minister Nirmala Sitharaman. The budget brought with itself a much-needed push for the growth of the real estate sector that will keep reaping benefits in the long run. The undertakings mentioned in the budget are expected to improve the situation of realty developers and alleviate the setbacks caused by COVID-19.

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Urban Planning For Tier 2 and Tier 3 Cities

One of the key areas that the proposed budget focussed on was the urban planning and infrastructure development of Tier 2 and Tier 3 cities. A budget of Rs 10,000 crore has been allocated for this development and will be managed by the National Housing Bank (NHB). This allocation is meant to boost economic activity in these cities and will greatly enhance real estate growth. This is aimed to put tier 2 and tier 3 cities at par with tier 1 cities in terms of commercial, residential and retail development.

The budget also talked about five centres of excellence for the urban planning of these cities. This is meant to create a committee of experienced professionals such as urban planners, economists and institutions. The agenda of the committee will be to recommend policies and implement plans and governance.

Infrastructure Advancements

A budget of Rs 3,100 crore was allocated for regional air connectivity. This allocation will circumscribe the construction of 50 additional airports, helipads, water aero drones and landing fields. This will lead to the development of new locations and amenities nearby. As these developments will surface, the result will be an impressive appreciation in land prices around the proposed sites.

Further, private investments are to be brought in by the Infrastructure Finance Secretariat for the construction of projects such as roadways, railways, and urban and power development. As per the previous year’s budget, the expansion of National Highways was declared to exceed 25,000 km. This year, a coordinated strategy to develop terminals, expressways and other infrastructure was discussed under the PM Gati Shakti plan.

Sustainable Cities

The agenda of the construction of smart and sustainable cities, backed by the increased allowance of Rs 16,000 crore, will play a trailblazing role in enhancing the quality of life of the region. It will enable the construction of state-of-the-art infrastructure, create better mobility options and transform the region in terms of sustainability. These developments will be instrumental in the elevation of the real estate potential in these cities, which will keep increasing in years to come.

Also Read:- Union Budget 2025-26: A Game Changer for Indian Real Estate

Benefits Of Affordable Housing

As per the budget, the tax rebate slab in the new tax regime has been increased from Rs 5 lakh to Rs 7 lakh. Due to this, investors are likely to show an inclination towards investing in the affordable housing sector. Additionally, the Union Budget of 2023-24 allocates a sum of Rs 79,000 crore for the Pradhan Mantri Awas Yojna (PMAY) houses, which is an increase of 66 per cent as compared to last year. This amount will encourage the supply of low-cost housing, a development for discerning investors to watch out for.