The real estate sector has had to settle with minor concessions from finance minister Arun Jaitley in Union Budget 2018-19.
Experts say that several allocations under the “Housing for all” programme have been made, which should increase the supply of affordable houses.
The establishment of a dedicated Affordable Housing Fund (AHF) will further support the objective of achieving the Modi government’s ambitious “Housing for all by 2022” mission.
Budget 2018 is supposed to act as an engine of growth for the affordable housing segment in the country.
“The relaxation of income tax adjustment in case of difference of less than 5% between the circle rate and consideration for real estate acquisitions is a welcome change.
“The finance minister also announced the establishment of a dedicated Affordable Housing Fund (AHF) under National Housing Bank, which would lead to cheaper credit to the companies developing affordable housing. It will drive demand, spur new projects in this segment, and every needy will be able to fulfil the dream of owning a house,” Ssumit Berry, MD of BDI Group, said.
“Under PMAY, the government is constructing nearly 1 crore houses, exclusively in rural areas, to be handed over by 2019. On the other hand, in urban areas, the government provided assistance to construct 37 lakh houses. The profit-linked exemption along with the infrastructure status for affordable housing has started pushing developers to undertake more budget housing projects, thus increasing private player’s participation in the sector,” says Surabhi Arora, senior associate director (research) at Colliers International India.
Gaurav Mittal, MD of CHD Developers Ltd, also says that Budget 2018 has given a major push to the “Housing for All” scheme.
“The real estate sector sees the Budget as balanced with focus on affordable housing. The government has been consistent with its efforts in boosting the affordable housing segment, which was seen in the previous Budget too.
“It has also increased the quantum of beneficiaries in CLSS under the Pradhan Mantri Awas Yojana (PMAY) by expanding carpet area and re-defining income definitions. Also, various other infrastructure projects like highway development and inner city rail network announced in the Budget will further open up new avenues,” Mittal says.
Apart from these measures, the allocation for affordable housing has been doubled to Rs 800 crore in Budget 2018.
“The finance minister has doubled the CLSS (credit-linked subsidy scheme) to around Rs 800 crore for the economically weaker section (EWS) and the lower-income group (LIG) for the current financial year, 2017-18. This, combined with a dedicated fund for affordable housing, will definitely boost this segment,” says Neh Srivastava, under secretary, ministry of home affairs, and president of the Central Secretariat Services Officers Society.