By Accommodation Times News Services
Finance Minister Arun Jaitley today on 10th July, Thursday, presented the Union Budget for the 2014-15 fiscal year in Parliament. Looking on housing, real estate and infrastructure sector Jaitley presented a budget focusing more on developments. As per the BJP’s manifesto they had promised affordable housing for all by 2022 and infrastructure development and they have fulfilled it by allocating Rs. 4, 000 crore to National Housing Bank (NHB) for financing low- cost housing.
As an addition to housing for all, government has increased the deduction limit on interest payment for housing loans from Rs. 1.5 lakh to Rs. 2 lakh. These factors will lead in improving sentiment of housing sector.
Gazing on the congestion in big cities due to people migrating from small cities, government has implemented measures to develop 100 smart cities around near metro cities allocating fund of Rs. 7, 060 crore. Besides, this FM has allocated additional funds of Rs. 2,142 crore for the development of housing in rural areas. Additional to rural development he has proposed Dindayal Gram Jyoti Yojana for electricity in rural areas and Shyam Prasad Mukherjee Yojana for urbanisation in rural areas.
Jaitley has made two major announcements related to real estate sector one is welcoming Foreign Direct Investment in real estate and infrastructure sector and setting up Real Estate Investment Trust (REIT) to finance infrastructure projects and infra investment trust will be set up to securitize infra projects. Measures will be implemented to re-introduce SEZ. This will fetch large amount of investment in realty sector.
Huge focus is dedicated to infrastructure projects in the budget FM has allocated a total of Rs. 37880 crores to NHAI for the construction and development of highways and additional Rs. 3000 crore to improve road connectivity in the North-East regions. Government has targeted to construct 8500 kms. of national highways in the FY15, this will improve the connectivity between cities and states, which will boost real estate market in small cities. Government has planned to raise Rs. 50, 000 crore for Municipal Debt Management for infrastructure and urban development.
Jaitley has emphasized on PPP mode for the developments in country. He has proposed PPP mode in many infrastructure projects like development of airports, water ports and Metro rails. He has proposed airports in Tier I & II cities, 16 new ports to be awarded in FY 15 and Rs.100 crore are allocated for Metro in Lukhnow & Ahmedabad.
No major announcement is made in relation to reduce construction cost, despite one exemption on custom duty of steel from 5% to 2.5%, this will subside construction cost upto some extent. Exemption on solar products is announced to promote utilization of solar energy in homes and realty projects.