The Indian economy is resilient and has rebound and grown on the basis of strong fundamentals. The economy has sustained multiple shocks of Demonetisation, GST, RERA and credit crisis of NBFCs. Humanity is currently facing a pandemic which has resulted in unemployment, income losses, business model dislocation and the biggest of all, an uneven economic recovery.
The ‘K’ shaped economic recovery created a wide divide between the bottom and the top of the income pyramid. Our biggest impediment to growth is rising inflation, interest rates and unsustainable oil prices, and hence the budget blueprint is crucial.
This budget tried laying the path for next 25 years, focusing immediately through the PM Gati Shakti with seven engines — infra push, multimodal transportation, logistic parks, partnership with state governments for urban planning and development etc. Surely it will help the economic recovery. A critical sector like real estate will see positive impact in medium to long term. Infrastructure status to data centres and energy storage systems including charging infra etc is a step in right direction. This will attract lots of global capital.
The thrust on digital, fintech, healthtech, edutech, clean teach and journey towards Prop tech have been initiated, but the devil lies in the details. Real estate needs more ‘end to end’ digitisation. This brings in transparency, disclosures and governance with ease of acquiring and selling homes. Also announced is the intention to bring in ‘One nation one registration software’ which is a most interesting and much required reform.
This budget stayed away from tax incentives to individuals for investing into housing and is surely a missed opportunity. Finally, this is a growth-oriented budget with focus on government capex and employment generation through revival in infra-related sectors. This may help continue momentum in real estate if execution of earlier reforms and new announcements budget are implemented seamlessly.
Sunil Rohokale
MD & CEO of ASK Group