Union Budget 2022 – Key Highlights & Changes Announced
Indian Real Estate is undoubtedly one of the highest employment generating sectors. Several industries are directly and indirectly dependent on it. Since the onset of the pandemic, the sector faced huge economic headwinds and a slow-down. Finance Minister Nirmala Sitharaman presented the Union Budget 2022-23 to the Parliament on 1st, Feb 2022. This year’s budget was based on a vision of the next 25 years and it focuses a lot on Infrastructure & Development.
Let us run through Budget Highlights and the changes proposed.
Budget 2022: Real Estate Highlights and Changes
This Union budget 2022 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 focused areas.
- Affordable Housing for All
Approx 60 million households can’t afford adequate housing facilities. To address this grave situation, Housing for All Mission- Pradhan Mantri Awas Yojana, PMAY was launched by the Government of India in 2015 to provide 2 crores of affordable housing by March 2022. Currently, 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 benefited through CLSS subsidy on housing loans. The Union Budget 2022 has further allocated Rs 48,000 crores for the completion of 8 million homes under the PMAY (Urban) and the PMAY (Gramin).
- Housing for Tier 2 and Tier 3
The Work-From-Home concept during the pandemic has led to a sudden surge in housing demands in tier 2 and tier 3 cities. To leverage the advantage, the government has pushed reformative action in tier 2 and tier 3 housing sectors for ramping up the infrastructure of towns.
- Moratorium Extension
The 2022 budget has extended the loan moratorium, Emergency Credit Line Guarantee Scheme (ECLGS) for one more year till March 2023, much to the delight of homebuyers. 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.
Know more – Your Guide to Look for Budget Apartments in Pune
- Vibrant Villages Scheme
For the infrastructural development of the Northern border villages of India, Vibrant Villages Programme has been launched. The border villages having sparse populations shall be covered under the development like infrastructure, housing, tourism, road connectivity, renewable energy access, Doordarshan direct to home access for education, and livelihood generation options.
- Solar Modules
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 aims at maintaining transparency in real estate transactions in the coming times. 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.
- 5 Centres of Excellence
The success of real estate projects lies in their planning and implementation. To give thrust to strong infrastructural development, five academic centers 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
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 categorically shifted its focus on balanced real estate growth inclusive of Tier 1 and Tier 2 cities growth. Besides these, there is also a proposal for mass transit systems so that the distances between megacities and small cities can be bridged up.
- One nation One registration
The central government has proposed single-window environmental approvals for better coordination between states and central government along with 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
Growth in Logistics and infrastructure is directly related to the growth of real estate. To promote the smooth movement of people, goods, and services, PM Gati Shakti has been introduced in Budget 2022 with an outlay of Rs 20,000 crores. Gati Shakti is a digital platform to bring in 16 ministries of railway and transport under one umbrella for integrated and seamless multi-modal connectivity. A total of 25,000 kilometers have been allocated for different projects: national highways and multimodal logistics parks to smoothen the supply chain and boost the manufacturing sector.
- Budget 2022 has increased the expenditure to boost demand and investment. Also, there is a profound focus on urban capacity building, digitization of land records, and proposed Special Economic Zone (SEZ) law.
Here’s hoping that these measures will change the face of Indian Real Estate in the coming years.