The upcoming Union Budget 2022-23 is expected to focus on affordability together with rental housing. The agenda is to elevate the overall progress of the pending real estate projects.
It is high time for the pre-budget consultations 2022-23, as the financial year 2021-22 is about to end. Real estate experts say the budget will focus more on making housing affordable. Additionally, it will bring a boost in rental housing. All this will be achieved by stretching up the existing finance systems. At the same time, the pending projects will be monitored to make sure that they get completed within the current financial year.
During the initial days of December, the government extended the deadline for real estate projects that aimed to offer pucca houses to each family that belonged to the rural area. Considering the delays caused due to the COVID-19, the developers were given an extension till 2024 for the completion.
Additionally, the Cabinet ministers have decided to offer an additional budget of INR 2.17 lakh crores for the Pradhan Mantri Awas Yojana-Gramin scheme to achieve the expected target by 2024. The target is to successfully build and deliver 2.95 crore houses.
Ajay Sharma (MD of valuation services) said “The government’s commitment towards boosting affordable housing is expected to remain intact.”
He added, “the government will continue to promote economical rental housing schemes through tax exemption. This will result in the acceleration of investments in the ‘Housing for All’ objective.”
Under the PMAY-U, the government has sanctioned an amount for 114.06 lakh houses, from which 52.55 lakh houses have already been delivered. Additionally, foundation stones for 89.36 lakh have been laid. Moreover, under the Smart Cities Mission, 3,131 projects which account for INR 53,175 crores have been delivered.
Under the Pradhan Mantri Awas Yojana–Urban, the maximum number of houses have been delivered in Uttar Pradesh ( 9.71 lakh) followed by Gujrat (6.22 lakh), Maharashtra (5.26 lakh), and Andhra Pradesh ( 5.26 lakh).
The projections that were not met in FY 2021 will be accomplished in FY 2022. Increased expenditure of INR 1.71 crores will be incurred to accommodate the previous loss. This will be added within the expected FY 2022 budget.
In funding terms, there is a reduction of INR 8000 crores towards the PMAY-U budget. The Cabinet has decided to sanction a budget of INR 60,000 crores, like the National Urban Housing Fund. The real estate developers are expecting a budget extension in the mid-section too.
Increased Liquidity for In-Progress Projects
The COVID-19 outbreak resulted in the generation of cascading impact across the real estate sector. Numerous project delays were encountered, which led to cash crunch fallout. Considering these situations, developers require a rational capital flow ito cope with the supply pipeline and associated tasks.
As per the experts, the current situation seeks additional corpus. Thus, the idea is to add more funds to the SWAMIH Funds to create pathways for successful deliveries for these in-progress projects. The vital thing, we will have to wait for the budget to know how the government will offer liquidity to cater to the long-stuck projects.
The government will be aiding 243 projects under SWAMIH funds with the investment of INR 22,972 cr. It is going to benefit almost 1,41,045 homebuyers. Additionally, to cope with the mounting debts, Finance Minister – Nirmala Sitharaman lately announced the establishment of a Bad Bank.
It is expected that the fourth Union Budget of Modi 2.0 will be presented on 1st Feb 2022 by Nirmala Sitharaman.
What Are the Expectations from the New Budget?
It is expected that Budget 2022-23 will address an array of critical issues such as the creation of more jobs, demand generation and growth in the economy. The real estate badly needs a lot from the new budget because of high delays on the previous project because of the pandemic. Additionally, we can expect changes in existing rates of direct and indirect taxes. Individual tax must be reduced to 25%. Currently, this accounts for 42%
Latest Updates for Union Budget 2022-23
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