The budget aimed to relieve subsidiary industries such as construction and cooperative societies
The government’s Union budget is welcomed by the real estate fraternity. With a strong focus on the affordable housing sector and infrastructure development, the announcements of the Union Budget 2022-2023 appear empowering and futuristic. The real estate sector has seen activity towards recovery from the challenges of COVID-19 thanks to regulatory support and liquidity. This budget could help to further accelerate this momentum and support overall economic growth. The budget announcements were aimed at relieving the affordable housing sector and subsidiary industries such as construction and co-operative societies. There were few quotes during the Union budget announcement that provided indirect stimulus for all major property asset classes – commercial, residential and warehousing.
In a bid to give a boost to the affordable housing mission, the Minister of Finance has recommended that more than 80 lakh affordable houses be built and delivered by 2023. These houses will be constructed under the flagship development scheme housing Pradhan Mantri Awas Yojana (PMAI). It will provide the weaker strata of society with the opportunity to own a home at an affordable price. In addition to this, the Minister of Finance also recommended an allocation of ₹48,000 crore in spending for the PMAY scheme.
The announcement of five centers of excellence in urban design and planning is a positive step that will complement the overall growth of the real estate sector. The increased and continued focus on the affordable housing sector will help revive the construction industry and related industry related to the real estate sector. Although there was a boost for affordable housing by providing a ₹48,000 crore package fulfilling the Prime Minister’s vision of housing for all, a standard definition of 60m and 90m affordable houses would have given a bigger boost to the entire housing industry, which indirectly supports more than 260 industries across India.
In the Union Budget 2022-2023, the Union government placed more emphasis on infrastructure development. Under Prime Minister Gati Shakti, national roads will be extended by 25,000 km over the next year. To improve connectivity, the Government intends to implement the National Cable Car Program in Public-Private Partnership (PPP). The seven drivers under PM Gati Shakti are roads, railways, airport, ports, public transport, waterways and logistics infrastructure. The Gati Shakti framework which will focus on the development of multimodal logistics parks and freight terminals can be considered as an excellent initiative for the warehousing sector. The emphasis on transit-oriented infrastructure development will certainly pave the way for more employment hubs, thereby unlocking the potential for residential and commercial development in a city’s key micro-markets.
Help for taxpayers
The 2022 budget proposal will allow individuals to update their tax returns (ITRs) within two years of the end of the relevant tax year by paying an additional 25-50% tax on interest tax , as proposed in the 2022 Budget. The intent of proposed Section 139(8A) is to allow true taxpayers to file an updated tax return where full particulars of certain income could not be incorporated. in the tax return due to lack of scheduled time for filing a late/revised tax return or for any other reason . The possibility of compliance is not intended to be available to taxpayers who are currently under control by the tax authorities or who have already taken advantage of this possibility once for a financial year. The budget highlighted the need to develop megacities and focus more on Tier II cities and Tier III cities. These cities are predicted to become economic powerhouses in the future. The Government intends to support and work with the States to strengthen urban capacities. To bring about a paradigm shift in “urban planning”, the Union government announced the formation of a high-level committee to make suggestions on policy issues and capacity building related to urban infrastructure development. The Minister of Finance felt that urban planning could not continue with a status quo approach.
Fair rules of the game
In an effort to reduce the burden on cooperative societies, the Union budget proposed to reduce the alternative minimum tax from 18.5% to 15%. The surcharge was also reduced to 7% for income of ₹1 crore to ₹10 crore. Currently, cooperative societies are required to pay an alternative minimum tax at the rate of 18.5 percent. However, companies pay the same at the rate of 15%. In order to ensure fair conditions of competition between cooperative societies and enterprises, the Minister of Finance reduced the surtax.
The Infrastructure and Energy Storage Systems Grant showcases the seven drivers under PM Gati Shakti, namely Roads, Railways, Airport, Ports, Mass Transit, Waterways and Infrastructure logistics. This will boost the infrastructure and construction industry across the country.
The adoption of the National Generic Document Registration System is intended to enable a uniform process for “registration anywhere” of deeds and documents. The ability to transliterate land records into all Annex VIII languages will help realize the country’s economic potential, including livelihood opportunities for the demographic dividend.
The writer is director, Ajmera Realty & Infra India Ltd. and Hon. secretary, MCHI CREDAI.