Infrastructure spending to boost real estate
Union budget focuses on economic expansion through spatial and digital connectivity. With Rs 1 lakh crore expenditure earmarked towards infrastructure development, real estate in the peripheral and peri-urban area is likely to get a boost coupled with an allocation of Rs 48,000 cr for affordable housing under PMAY. Along with this, the logistic sector and were-housing will get a further impetus. Data centers have been given the infrastructure status.
Rs 48,000 crores have been allotted for development under the PMAY scheme, with a target to complete 80 lakh houses for identified eligible beneficiaries in urban and rural areas. The central government will work with the state governments to reduce the required time for all land and construction-related approvals.
The union budget has prioritised multimodal connectivity between mass urban transport and rail network. The finance minister announced an outlay of Rs 20,000 crore for building a holistic infrastructure in India under the Gati Shakti National Master Plan. The initiative will increase public connectivity within the city and across the region.
This would make land in the periphery more accessible and open for future development. It is likely to increase housing sales in the periphery areas and flatten the price growth curve, while the sales in the city center might feel the pressure. It will also boost logistic and warehousing activities. The budget pushes for better urban planning in India’s cities, focusing on urban sector policies, capacity building, planning, implementation, and governance.
The data center and energy storage system have been given infrastructure status to ensure easy financing to the sector. The Centre’s budgetary capital expenditure increased from Rs 5.5 lakh crore in FY22 to Rs 7.5 lakh crore for FY23. The FM announced a massive hike in financial assistance to states for Capex (in interest-free loans) from Rs 15,000 crore in FY22 to Rs 1 lakh crore in FY23.
Pankaj Kapoor
Founder and MD, Liases Foras