Impact of Budget 2022 on Real Estate

Real Estate is undoubtedly one of the highest employment generating sectors in India and several industries are directly and indirectly dependent on it. After facing huge economic headwinds since the onset of the pandemic, the sector eagerly looked forward to Budget 2022 for its revival.

This budget gave an impetus on both macro growth and micro development that covered the many emerging and established sectors like fin-tech, digital rupee, tech-induced growth, energy sector, start-ups, infrastructure development, and climate as major focussed areas.  The budget also touched upon some of the most critical issues for the revival, and growth of the real estate industry, like affordable housing and commercial real estate.

Here is a sneak peek into the major budget offerings especially for real estate

Affordable Housing

Even though India is one of the fastest-developing economies in the world, there is a huge housing shortage in the urban and rural areas. Housing is much unaffordable to the rural and urban poor in the country. As per government statistics, 60 million households in India still can’t afford an adequate housing facility in both rural and urban India.

To address this grave situation, Housing for All Mission- Pradhan Mantri Awas Yojana, PMAY was launched by the Government of India in 2015, under which 2 crores affordable housing was planned to be delivered by March 2022 along with the sops like reduction in GST and credit-linked subsidy scheme (CLSS) for interest in a home loan. The present-day status of these deliverables is that out of 1.14 crore houses, 91.5 lakh houses are under construction and 53 lakh houses have already been delivered. 17.35 lakh home buyers have been benefitted through CLSS subsidy on housing loans. Looking at these impressive numbers, the demand and deliverables, the 2022 budget further allocated Rs. 48,000 crores for the completion of 8 million homes under the PMAY (Urban) and the PMAY (Gramin)

Tier 2 and Tier 3 Housing

The prolonged lockdown in the pandemic had promoted the concepts of Work from Home and Work from Anywhere in the past few years. This has seen a sudden surge in housing demands in tier 2 and tier 3 cities and to leverage the advantage, the government has pushed the reformative action in tier 2 and tier 3 housing sector for ramping up the infrastructure of towns so that they can offer better home prospects to these home buyers. Therefore, budget 2022 priorities infrastructural development and modernising residential and commercial projects in tier 2 and 3 cities.

Moratorium extension

To the delight of home buyers, the 2022 budget has extended the loan moratorium, Emergency Credit Line Guarantee Scheme (ECLGS) for one more year till March 2023. The guarantee cover has been expanded by Rs 50,000 crore i.e., Rs 5 lakh crore. This would support the current liquidity issues faced by the home buyers.

Vibrant Villages

The Northern border villages of India have figured in the scheme of Union Budget this time and a focus on their infrastructural development is put in the budget. Under the scheme of Vibrant Villages Programme, the border villages having sparse populations shall be covered under the development like infrastructure, housing, tourism, road connectivity, and renewable energy access, Doordarshan direct to home access for education, and livelihood generation options.

Aspirational Blocks Programme

The 2022 union budget charted a development plan for the most backward districts of the country. With the efforts of previous central government efforts, 95% of the    112 districts have progressed appreciably in the last few years in the indices like health, nutrition, financial inclusion and basic infrastructure but the rest of them still continue to lag in quality of life and infrastructural terms. Additional funding has been allocated to fulfil this vision of central government.

Solar Modules to be Pushed

A budget of ₹19,500 crores has been allocated to push the solar energy initiatives like manufacturing solar modules in real estate infrastructure. This will facilitate the renewable energy prospects in the housing segment.

Digital Rupee and Transaction

The government has focussed on transparent real estate transactions in the coming times and the introduction of the digital rupee using blockchain technology will prove to be a milestone in achieving this goal. The digital Rupee will be issued by RBI under strict guidelines.

Reduction in Corporate Surcharge

The corporate surcharge has also been reduced from 12% to 7% and is a relief to the developer community.

Centre of Excellence

The success of real estate projects lies in their planning and implementation. To give thrust to strong infrastructural development, five academic centres of excellence have been proposed with a budget of Rs 250 crore each so that the research and innovation in real estate can be pushed through in the coming times.

Commission for Urban Planning

For better implementation of infrastructural and real estate development and to cater the problem of increasing urbanisation, the 2022 budget has proposed to set up a high-level commission of think-tanks like planners, economists, and academic institutions for suggesting efficient urban sector planning policies, and capacity building requirements needed to increase commercial real estate prospects. The government has shifted its focus on balanced real estate growth inclusive of Tier 1 and Tier 2 cities growth.  There is also a proposal for mass transit systems so that the distances between megacities and small cities can be bridged up.

Single Window Approvals

One of the major loopholes in affordable homes has been the red-tapism that leads to the delaying of the projects. To reduce this roadblock, the central government has proposed single-window environmental approvals, better coordination between states and central government along a uniform registration of deeds that can be done from any part of the country.

One nation One registration is a reformative step to create a transparent process in facilitating land transactions and sale deeds. The proposal of working with more regulators than intermediaries was also tabled for transparent real estate transactions.

PM Gati Shakti and Commercial Real Estate

Logistics and infrastructure growth is directly related to the growth of real estate and to promote smooth movement of people, goods and services, PM Gati Shakti is introduced in Budget 2022. An outlay of Rs 20,000 crore toward Gati Shakti has been planned to implement Gati Shakti which is a digital platform to bring in 16 ministries of railway and transport under one umbrella for integrated and seamless multi-modal connectivity will substantially benefit the commercial real estate. 25,000 kilometres have been allocated for different projects, like national highways and multimodal logistics parks to smoothen the supply chain and boost the manufacturing sector. It will be the precursor to more commercial real estate’s space requirements, like warehouses and data centres.

Find a Budgeted Home in Wave City

Wave City Ghaziabad, located on the prime location of NH-24 offers a cluster of affordable residential units under the PMAY scheme i.e. Swamanorath. Swamanorath is two towers, G+14 build-up, situated in sector-6, Palmwood Enclave, Wave City, adjacent to the police station. The units are available in 1, 2, and 2+S BHK options and the size of the carpet area ranges from 24 sq.m. to 48 sq.m. The contemporary design of Swamanorath ensures excellence and comfort at affordable pricing while assuring top-notch amenities for carefree living. Apart from, Swamanorath, Wave City offers a wide variety of housing options ranging from independent floors, low and mid-rise apartments to ultra-modern and luxury housing units.

To Know more about Wave City’s products, feel free to get in touch or visit our website; https://www.wavecity.in.

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