On Tuesday, Union Finance Minister Nirmala Sitharaman presented the budget in the Lok Sabha. Before this, several industry stakeholders had made requests and suggestions regarding what should be included for the real estate sector in the budget. So, did all those requests make it? Let’s see what Nirmala has actually provided for the real estate sector.
Prime Minister Awas Yojana (PMAY)
Under the Prime Minister Awas Yojana – Urban scheme, the central government has decided to provide Rs 2.2 lakh crore in aid for housing construction for one crore urban poor and middle-class families over the next five years. To facilitate affordable loans, interest subsidies have also been proposed. Combining the central aid of Rs 2.2 lakh crore with a total investment of Rs 10 lakh crore, Nirmala Sitharaman announced the launch of the PMAY Urban 2.0 scheme.
Rental Housing
To promote rental housing markets, the government will enhance the availability of rental homes and develop policies and regulations needed for quality and transparency. Nirmala Sitharaman also mentioned that government and private partnerships will be used to build rental housing with dormitory-style facilities for industrial workers.
Stamp Duty
Nirmala Sitharaman mentioned that the central government will encourage states to reduce high stamp duties. She suggested that states collecting high stamp duties should consider reducing them. Additionally, she highlighted that there will be a focus on further reducing taxes on properties purchased by women. This will be made a mandatory aspect in urban development schemes.
Land Reforms
As part of land-related reforms, the central government has proposed assigning a unique identification number or land-Aadhaar to rural lands. It also proposed the digitization of all urban land records. Nirmala Sitharaman mentioned that the central government will coordinate with states to advance land reforms in both rural and urban areas. The central government will provide financial assistance to encourage states to complete these reforms within the next three years.
She detailed that land management, planning, administration, urban planning, and land use in rural and urban areas will be part of the land-related reforms and actions. For rural areas, measures will include assigning a Unique Land Parcel Identification Number (ULPIN) or land-Aadhaar, digitizing land maps according to current ownership, surveying map subdivisions, creating land registries, and linking them with farmers. Urban lands will be digitized using GIS mapping. The government plans to establish an IT-based system for managing and updating property records and handling taxes.
Cities as Growth Hubs
Nirmala Sitharaman mentioned that the central government will work with states to develop cities as growth hubs. They plan to develop peri-urban areas appropriately with economic, transportation, and town planning schemes.
₹15,000 Crores for Amaravati
In accordance with the Andhra Pradesh Reorganization Act, the central government will provide ₹15,000 crores in financial aid to the state capital Amaravati through various agencies during this fiscal year. Additional support will be provided in the coming years as well.
PM Surya Ghar Muft Bijli Yojana
Due to the positive response to the PM Surya Ghar Muft Bijli Yojana scheme announced in the interim budget, the central government has decided to further promote it. Under this scheme, the government will support the installation of subsidized solar power systems in one crore homes across the country.
Industrial Parks
The central government plans to establish plug-and-play industrial parks in nearly 100 cities across the country. These parks will be set up with state governments and private sector partnerships. Additionally, under the National Corridor Development Program, 12 industrial parks will be sanctioned.
Demand for Commercial Real Estate
Actions such as the removal of the angel tax and reduction of corporate taxes for foreign companies are expected to encourage startups as well as Global Capability Centers (GCCs). These measures are likely to significantly increase the demand for commercial real estate.
