Union Budget 2022: Impact on Indian Real Estate -Honeyy Group

Union Budget 2022: Impact on Indian Real Estate

Here’s the most-awaited and important aspect for outlining the vision of growth for the next 25 years. The Union Budget 2022-23 was presented by Hon’ble Union Finance Minister Smt. Nirmala Sitharaman on 1st February, 2022.

The focus on urbanization, infrastructure and sustainability reflects the government’s positive intent to put the Indian Economy on the path of growth and stability. It continues to provide the impetus for growth.

It is admirable to note that this Budget reflects a blueprint that is futuristic and inclusive laying a foundation along with four key areas of priority: PM GatiShakti; Inclusive development; Productivity Enhancement and Investment, Sunrise Opportunities, Energy Transition, and Climate Action; and Financing of Investments.

This will directly benefit our youth, women, farmers, and help raise productivity and accelerate economic growth and development, which will augur well for the realty sector as well.

PM GatiShakti is a transformative approach for economic growth and sustainable development. The approach is driven by seven engines, namely, Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure.

Here are some of the key highlights from Union Budget 2022 on Infrastructure

PM Gati Shakti National Master Plan for Rs. 20,000 crore
National Highways network to be expanded by 25,000 km in 2022-23
National Master Plan on Expressways will be formulated in 2022-23
400 new generation Vande Bharat trains to be manufactured in next 3 years
60 km of ropeway projects under the Parvat Mala project
Metro systems, multi-model connectivity will be facilitated on a priority
100 Gati Shakti Cargo terminals in the next 3 years

Budget impact on Road Network:

PM GatiShakti Master Plan for Expressways will be formulated in 2022-23 to facilitate faster movement of people and goods. The National Highways network will be expanded by 25,000 km in 2022-23. Rs.20,000 crore will be mobilized through innovative ways of financing to complement the public resources.

Budget impact on Housing:

To boost the ‘Housing for All’ mission, 80 lakh houses will be completed for the economically weaker sections of the society to own a housing unit at an affordable cost under the flagship housing development scheme “Pradhan Mantri Awas Yojana” (PMAY), both rural and urban.

Adding to this, the Finance Minister also mentioned that the government has allocated Rs. 48,000 crore for this purpose. The continued focus on the affordable housing sector will help revive the construction and allied industry related to the real estate sector.

The Central Government will work with the state governments for a reduction of time required for all land and construction-related approvals, for promoting affordable housing for the middle class and Economically Weaker 10 Sections in urban areas. The government also work with the financial sector regulators to expand access to capital along with a reduction in the cost of intermediation.

The budget on Steel and the impact on realty:

The real estate sector is not an independent unit. It works with several other sectors such as Steel, Iron, Cement, and other materials. Last year, the Customs duty exemption given to steel scrap is being extended for another year to provide relief to MSME secondary steel producers. Certain Antidumping and CVD on stainless steel and coated steel flat products, bars of alloy steel and high-speed steel are being revoked in larger public interest considering prevailing high prices of metals thus reducing imports from China and promoting domestic manufacturing.

Land records Management:

Efficient use of land resources is a strong imperative. States will be encouraged to adopt Unique Land Parcel Identification Number to facilitate IT-based management of records. The facility for transliteration of land records across any of the Schedule VIII languages will also be rolled out.

The adoption or linkage with National Generic Document Registration System (NGDRS) with the ‘One-Nation One-Registration Software’ will be promoted as an option for a uniform process for registration and ‘anywhere registration’ of deeds & documents.

Urban Development:

25 years from now, nearly half of the population is likely to be living in urban areas. To get ready for this, orderly urban development is of critical importance. For this, on the one hand, the government need to nurture the megacities and their hinterlands to become current centres of economic growth. On the other hand, we need to facilitate tier 2 and 3 cities to take on the mantle in the future.

Parvatmala: National Ropeways Development Programme:

As a preferred ecologically sustainable alternative to conventional roads in difficult hilly areas, National Ropeways Development Programme will be taken up on PPP mode. The aim is to improve connectivity and convenience for commuters, besides promoting tourism. Contracts for 8 ropeway projects for a length of 60 km will be awarded in 2022-23.

What does real estate industry veterans say about Union Budget 2022-23?

Union Budget 2022-23 has made various housing and construction provisions. The allocation of Rs. 48,000 Crores for the completion of 80 Lakh houses under PMAY is the most significant of them all. The extension of PMAY until 2023 is a positive move to provide affordable housing for those who need it. We hope to make a noteworthy contribution to providing affordable housing for all.

Mukka Obul Reddy, Chairman & Managing Director - Honeyy Group