Post Budget Reaction | Colliers | India Sotheby’s International Realty | Signature Global

 Mr. Ramesh Nair, CEO, India and Market Development, Asia, Colliers

"The Union Budget 2023-24 commits to green growth while focusing on augmentation and enhancing urban infrastructure, technology, and inclusive development. At the same time, the budget throws open the doors for increased consumption and capital investment, to drive growth. The capital outlay for infrastructure at INR10 lakh crore, or 3.3% of GDP is significant as it can lead to multiple effects across sectors and set a strong footing for resilient growth. This includes aspects such as the urban infrastructure development fund at INR10,000 crore per annum. A dedicated investment of INR 10,000 cr through the urban infra development fund will result in the creation of quality urban infrastructure thereby improving quality of life. This will also translate into higher demand for housing and commercial real estate.

For the real estate sector, the government has increased the allocation for Pradhan Mantri Awas Yojana by 66% to about INR79,000 crore. The increase in outlay will go a long way in bridging the gap between demand and stock in affordable housing. This will provide opportunities for associated stakeholders such as construction companies, contractors, etc. Further, expected changes in income tax slabs will result in higher disposable incomes, boding well for prospective homebuyers, mainly in the affordable and mid-segment.

The announcement to set up 100 labs for developing 5G service applications in India will give a boost to startups, especially in the technology sector. This, along with a continued focus on digitization can rekindle the IT sector, and spur some activity in the commercial office space.

We believe that the thrust on electric mobility is the need of the hour. The budget provided provisions related to battery production, and investment in energy transition, which will give a fillip to the EV industry in India. Between 2023-2027, the EV space in India is likely to see investments of INR94,000 crore (USD12.6 billion) across the automotive value chain. The government’s focus on creating more decentralized storage facilities for agricultural products can create more warehousing demand, especially on the cold storage front. This, along with the government’s disinvestment schemes can unlock immense value in the warehousing space".

Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India

"The slew of tax measures in personal tax indicates to provide more disposable income for the middle class and will boost consumer spending. With increased allocation to PMAY, the government's emphasis on providing housing to all, especially the urban poor, significantly boosts real estate spending. Real Estate housing demand continues to remain strong, and consistency in policy framework shall keep the momentum."

Mr. Amit Goyal, CEO, India Sotheby’s International Realty

The Union Budget has laid out a long-term path of growth and capital investment and that is extremely positive for the Indian economy.  The increased allocation to housing projects under PM Awas Yojana by 66% to Rs 79,000 crore will certainly help the affordable housing segment. Rationalization of tax slabs and enhancement of tax rebate is going to benefit the middle class which will boost domestic consumption and should aid in keeping demand for homes strong. Overall, the budget has addressed all concerns that are needed to keep India as the fastest-growing economy of the world.

However, the proposed cap on deduction from capital gains on investment in residential houses under sections 54 and 54F to Rs 10 crore can be a big deterrent for the housing industry. We sincerely appeal to the government to reconsider this limit.

Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India), Ltd.

This year’s budget touched upon the most critical issue for the revival and growth of the affordable housing segment. PMAY's budgetary allocation increased by 66%, which is good news for affordable housing. The new allocation of Rs 79000 crores in the budget 2022-23 will help countless Indians realise their home aspirations. Also, the increased allocation will lead to more housing projects being taken up, in both rural and urban areas. The scheme will provide a much-needed boost to the housing sector and continue to assist those from the EWS and LIG sections of society in owning a home.

Moreover, the Finance Minister announced that infrastructure and investment will be the government's third priority, and capital expenditures will be increased by 33% to accelerate the country's development. This increased spending is expected to help create more jobs, spur economic growth, and create a more prosperous nation. Also, in order to convert cities from manholes to machine holes, an urban infrastructure development fund of Rs 10000 crore will be set aside every year for urban development. This fund will help enhance India’s urban living environment besides modernising India's cities and towns.