Indian Budget 2023-24 -Honeyy Group

Indian Budget 2023-24

The Indian Budget 2023-24 has brought many changes in the fiscal and monetary policies of the government. It is commendable that the budget focuses on inclusive development, green growth, sustainability, education, economic empowerment of women, the welfare of senior citizens, affordable housing, access to clean drinking water, digital transformation, employment for the youth, improving the investments in infrastructure development, and a strong financial sector.

The moot point in our discussion would be the policy changes and allocation with respect to the real estate sector in specific, and the construction and infrastructure sector, in general. The Finance Minister’s focus in this year’s budget has been majorly on the welfare of middle-income groups. Here are a few pointers on how the budget directly or indirectly impacts the real estate sector

The budget for Pradhan Mantri Awas Yojana (PMAY) has been increased by 66 percent to more than Rs 79,000 crore. The government proposed to change the way capital gains are calculated when a joint property development occurs, meaning the amount received through cheques will be considered as consideration. Interest paid on borrowed capital for buying or improving a property can be deducted from income or included as part of the acquisition or improvement costs when the property is transferred, which would reduce capital gains. To avoid taxation on capital gains, the proceeds can be invested in a residential property, with a cap of Rs 10 crore.

By implementing changes in property tax regulations and making sure user fees for urban infrastructure are well-defined, cities will be encouraged to increase their credit rating in order to obtain municipal bonds.

State governments and municipalities will be motivated to carry out urban planning changes and activities to convert our cities into 'sustainable cities of the future'. This involves the effective utilization of land resources, adequate resources for urban infrastructure, transit-oriented growth, increased accessibility and cost-effectiveness of urban land, and chances for everyone.

The recently formed Infrastructure Finance Secretariat will aid all involved parties in obtaining more private funding for infrastructure, including railways, roads, urban infrastructure, and power, which largely rely on public resources.

It has been proposed that any income generated by a body, authority, board, trust, or commission that has been set up by a Central or State Act with the aim of providing housing, or planning, developing, or improving cities, towns, and villages, or regulating any activity or matter, should be exempted regardless of whether it is conducting commercial operations.

An Urban Infrastructure Development Fund (UIDF) will be set up through the use of funds from priority sector lending that have not been used. This will be run by the National Housing Bank and will be used by public authorities to develop infrastructure in Tier 2 and Tier 3 cities. The states will be encouraged to use resources from the 15th Finance Commission, as well as any existing programs, to introduce user fees while accessing the UIDF. We anticipate having Rs 10,000 crore available each year for this purpose.

This budget provides a strong financial base to improve investments in infrastructure development and ensure sustainable green growth. It is hoped that this budget will go a long way in achieving the desired economic development of India. Overall, the Indian Budget for 2023-24 is a promising step in the right direction. The focus on inclusive development, green growth, education, and the welfare of vulnerable groups is commendable and speaks to the government's commitment to ensuring sustainable and equitable growth for all citizens. We look forward to seeing these initiatives come to fruition in the years to come and hope that the government continues to prioritize investments in these areas.