Budget 2018 : Real Estate Not much to Cheer About
Other than Affordable Housing, no specific announcement for real estate industry means it has been a watershed moment for the industry. Industry reeling under the impact of GST/ RERA & Demonetization needed a booster dose in this budget.
The announcement of the reduction in GST Rate from 8% from 12% just before the Union Budget for Housing covered under CLSS scheme, provided a cheer for the industry and pointed towards many more changes on the anvil in the budget. The announcement of NHB fund to push the “Housing for All” campaign at the start of the budget, prompted a rally in the real estate scripts but failed to sustain during the day.
Being the last budget before General Election, most expected a populist budget, but so was not the case. Most of the announcement and programs provided outlay with far-reaching consequences.
Ease of Living was the buzz word of this budget. The focus was on providing the best social and infrastructure support through medical assistance to the poor and upgrading the urban transport to providing last mile connectivity to the entire habitable community of the country.
But there was no specific benefit offered to the home buyers. There were no changes in the income tax slab nor were there any new benefits offered on the home loans. Both things together surely create any new interest in home buying.
Affordable Housing has been the continuous flavour with the government and now they have proposed to build homes even in the rural sector. But how fast can the government machinery works towards fulfilling these goals. Will they provide the incentive to the private sector to fulfil their dreams and how lucrative would it be for the developer to so, remains to the seen.
One of the long-term benefits that shall be seen if the ideas presented in the budget are implemented in the timely fashion, is the regional air connectivity scheme to connect the 56 unserved airports. Better connectivity shall surely push the demand for office space in this city. Which surely shall serve as a catalyst to drive quality residential demand in the cities.
The government has put a lot of emphasis on infrastructure development and proposed an outlay around 6 lac crore, which if implemented well will go a long way in creating a strong global standard of infrastructure in the country.
Though there was no confidence boosting short-term take ways, government financial prudence in maintaining the fiscal deficit to 3.5% in this financial year and proposed 3.3% in the coming financial year shall provide a strong image of the government in control of its finances and provide the robust outlook in the coming years.
