The Dynamic Effects of the Productive Union Budget 2024-25 on Real Estate of India

Rural Development

To upgrade and develop the rural sector of India, the rural economy needs to be strengthened by improving agriculture and rural areas. Still certain disparities are found in agriculture, rural industry and services, but the Central Government is offering a key role in agriculture and rural development. They are planning to establish Agriculture Council for coordinating with states connecting with GST council.

FM has allocated Rs.2.66 lakh for rural development, including rural infrastructure projects.  Government has decided to enhance the road connectivity by improving highways like Patna-Purnea Expressway, the Buxar-Bhagalpur Expressway, areas of Bodhgaya, Rajgir, Vaishali, and Darbhanga and most significantly, a two lane bridge will be constructed over Ganga River in Buxar with an investment of Rs.26000.

The Co-Founder of BOP Realty, Gaurav Mavi expressed his gratitude for the current budget by identifying its notable focus on rural development. He mentioned, “The entire budget is praiseworthy with special mention to its strong emphasis on rural development which is vital because around 70 percent of our population resides in rural areas. This area has been overlooked for some time, so it's encouraging to see that attention is finally being focused on it.”

Refinement of Tax System

In a noteworthy tax policy modification, the national administration has declared that indexation benefit will be abolished for immovable properties procured after 2001. However, it will remain unchanged for those acquired before that time period while also proposing to cut down long-term capital gains (LTCG) tax on real estate from 20% to 12.5%, with an aim of streamlining taxation computation procedures. Analysts are anticipating a weightier levy imposition upon property sellers due to this alteration which might impede growth in the field of realty as stated by them.

Sitharaman encourages the states to collect stamp duty by lowering down the rates and stamp duties will be declined if the property is purchased by a woman.

Gaurav Mavi also expressed his delight about the tax system after union budget and said, “The realty sector benefitted greatly from fiscal stimulus such as reduction in stamp duty and development premium to decrease unsold inventory, strengthen developers’ financials and begin fresh supply cycles. Also, I was expecting the cut down on GST on new homes from 5% to zero percent. Doing so would make new homes more affordable and could very well be included in the budget.”

Rental Housing

Millions of people come to different cities of India from the outskirts or rural areas of the country in search of jobs or pursuing higher education. An affordable rental home is very needful for them who don’t have a hefty income. So, FM has initiated a scheme called ‘Rental Housing’ dormitory-type accommodation which will be facilitated in PPP model with VGF support and commitment from anchor industries.

Water Supply & Sanitation

The State Governments and Multilateral Development Banks have joined hands, to promote bankable projects to provide water supply, sewage treatment, and solid waste management for 100 major cities. These initiatives will also incorporate the use of treated water for irrigation purposes as well as filling up nearby tanks.

Power Generation

To strengthen the infrastructure of supply in India, a new scheme called PM Surya Ghar Muft Bijli Yojana was installed and immediately received reaction from more than 1.28 Cr registrations and 14 Lakh applications.