Nirmala Sitharaman, India’s first woman finance minister laid the Union Budget 2019-20 on the table of the house today. In the budget, various initiatives are introduced to strengthen the Indian real estate market as the finance minister in her budget speech said that more focus will be given affordable housing, starts ups and Joint-ventures.
While talking about investment, Finance Minister proposed that the Reserve Bank of India i.e RBI will work as the regulator of the Housing Fiancé Companies [HFC] the role that was earlier played by the the National Housing Board i.e. [NHB]. This is a smart move by Union Government as both the financial lenders as well as the borrowers will come under scrutiny.
The first ever introduced Real Estate Investment Trust i.e. REITs is also proposed to come under the asset monetization strategy, Sitharaman said.
While talking about affordable housing that aims to offer Housing for All by 2022, Nirmala Sitharaman in her debut budget speech informed that a total of 26 lakh homes are developed under PMAY (Urban) and 47 lakh houses are under multiple stages of construction. During the budget speech, Finance Minister also informed that on a whole 81 lakh homes sanctioned under PMAY (Urban) with an investment of Rs. 4.83 lakh crore.
The Finance minister also informed that the average time for the completion of dwelling units under the PMAY scheme has come down from 314 days to 114 days. Apart from this, 1.95 crores more houses are to be approved under PMAY (Gramin) by the Union Government and 1.5 crore dwelling units are already constructed under the PMAY [Gramin] Scheme in the past five years.
The real estate sector has multiple issues to deal with and rental housing is one of them. The Finance Minister proposed creation of a Model Tenancy Act to structure the rental housing market by the Government. She further said that that the present laws FM Sitharaman stated that the current rental laws are archaic and thus its time to formulate a new Rental housing policy.
Tax and Real Estate Sector
The homebuyers are given a clear cut benefit of tax exemption upto Rs. 3.5 lakh on the purchase of a housing unit in the price bracket of Rs. 45 lakh.
The Union Budget 2019-20 propose an extension of tenure to exemption capital gains that are generated from the sale of residential house to make investment in startups till March 31, 2021.
The Union Government proposes 100 lakh crore towards infrastructural development in the next five years and aims to provide electricity alongwith clean cooking facilities to all the families by 2022. The Finance Minister also aims to provide clean drinking water for all rural homes by 2024.
Nirmala Sitharaman, the Finance Minister also proposes development of nearly 30,000 km roads by using green technology and recycled plastic under the PM Gram Sadak Yojana [PMGSY]. Apart from this, nearly 210 km metro lines have also become operational in 2018-19.
In the third phase of PMGSY nearly 1.25 lakh km of roads are proposed to be upgraded at an estimated cost of Rs. 88,250 crore.
The Government is also making efforts towards development via Pradhan Mantri Gram Sadak Yojana, Bharatmala Pariyojana, Sagarmala Project, Udan, Industrial and Dedicated Freight Corridors.