The Budget of 2022 is out and it has not brought any really massive announcements for the Real Estate sector of India. However the union budget announced a renewed push for the development of the infrastructure in India and a really big allocation was made for the subsidized housing under the Pradhan Mantri Awas Yojana where 48000 Crores has been set aside for this scheme. This has been hiked by a massive 75% over the previous fiscal year. The scheme has been given preference to push the “housing for all” initiative and to boost economic activities.
The demand for affordable housing has been on the increase over the past few years and is still an ongoing phenomena and the increased outlay should help [in increasing the affordable housing stock during the next year. A further outlay of 20000 crores has been also allocated for the project Gati Shakti for the implementation of the infrastructural connectivity projects like urban transport and highways. This scheme will focus on multimodal logistic parks and cargo terminals which will also boost the warehousing sector of the economy.
For commercial real estate new legislation is expected in lieu of the Special Economic Zone Act or SEZA. When replaced with new legislation this will make Export oriented parks more attractive for investors. The benefits will also filter down to the technology companies which export services and this will benefit the commercial real estate segment greatly was the opinion of Mr Ramesh Nair the CEO and MD of Colliers.
Data centers have also been given the infrastructural status in the budget and enable them to access cheaper finance which should boost the digital environment in India.
Furthermore there has been an announcement of one nation – one registration structural reform to facilitate land transfers and register sale deeds from any place all over India. With the establishment of the new software there will be no need for the physical presence for complying with registration documents and this can be done from any place across state border digitally. Once the land records are digitalized it will be of great help to make possible smoother and faster digital transactions in real estate in the future and will do away with the long legal process and lengthy transaction cycles which was the norm when records were not digitalized.
Another announcement was the clarification in the TDS Policy with the announcement of a 1% deduction of TDS on sale price of non agricultural immovable property of the value of over 50 lacs on the basis of sale price or the Stamp duty value whichever is higher. The fine for the non issuance of TDS certificates by the deductors has been raised from 100 per day to 500 per day. This should facilitate a faster compliance of this demand by the deductors. An announcement of relaxation in the GST was expected by the industry to boost the demand for housing but here there was only disappointment in store as there was no such reduction in the current GST structure for real estate industry.