Domnic Romell, President, CREDAI-MCHI
Applauding the government for presenting a Viksit Bharat budget focused on
simplification and digitized infrastructure
India : Finance
Minister Nirmala Sitharaman unveiled the first budget of the Modi 3.0
government today. Here are the reactions from industry experts across the real
estate, education and manufacturing sectors.
Mr. Domnic Romell, President,
CREDAI-MCHI, the apex body of the real estate industry in the Mumbai
Metropolitan Region (MMR):
“The Union Budget 2024-25 has brought forth a comprehensive and
ambitious vision for the real estate sector, particularly benefiting urban
centers like Mumbai. CREDAI-MCHI finds several aspects of the budget to be
highly encouraging and potentially transformative. The Union Budget 2024-25
presents a robust framework for the growth and development of the real estate
sector. The emphasis on affordable housing, urban infrastructure, industrial
development, and digitalization are particularly beneficial for a dynamic and
densely populated city like Mumbai. CREDAI-MCHI is optimistic about the
opportunities these initiatives will bring to the real estate sector and to the
economy.
Boost to Affordable Housing
The announcement of constructing 3 crore houses under the Pradhan Mantri
Awaas Yojana (PMAY) in both rural and urban areas is a significant step towards
addressing India’s housing shortage. Specifically, the allocation of ₹10 lakh
crore to meet the urban housing needs of 1 crore individuals under PMAY will provide
a much-needed impetus to the affordable housing segment in Mumbai. This massive
investment will likely stimulate demand, making homeownership a reality for
many and driving growth in the sector.
Urban Development and
Infrastructure
The budget's focus on Transit-Oriented Development (TOD) for 14 large
cities, including Mumbai, is a game-changer. TOD plans will not only improve
connectivity and reduce congestion but also enhance the livability and
attractiveness of urban areas. By integrating residential and commercial spaces
with public transport networks, Mumbai can look forward to more sustainable and
efficient urban development.
Industrial Parks and Employment
Generation
The development of industrial parks with complete infrastructure in
partnership with state and private players across 100 cities, including the 12
parks under the National Industrial Corridor Development Program, is a
strategic move. This initiative will spur industrial growth, create employment
opportunities, and boost economic activity. For Mumbai, known as a financial
and commercial hub, these developments will enhance its industrial and
logistical capabilities.
Rental Housing and Worker
Accommodation
The facilitation of rental housing with dormitory-type accommodation for
industrial workers through the Viability Gap Funding (VGF) model is a
commendable initiative. This addresses a critical need for affordable, decent
housing for the workforce, which is essential for sustaining Mumbai's
industrial and manufacturing sectors.
Stamp Duty and Property
Purchases
Encouraging states to moderate high stamp duties and consider lowering
duties for property purchases by women is a progressive step. In a city like
Mumbai, where real estate prices are among the highest in the country, reducing
stamp duty can make property transactions more affordable and stimulate market
activity. Additionally, promoting gender equity through lower duties for women
purchasers is a socially responsible move. CREDAI-MCHI was advocating for the
same since a very long time and we are glad that our prayers have been
addressed.
Digitalisation of Land Records
The digitalisation of land records in urban areas with GIS mapping and
an IT-based system will greatly enhance transparency and efficiency. For
developers in Mumbai, this means smoother and more secure transactions,
reducing the risks associated with property disputes and unclear titles. It
will also facilitate better urban planning and management by providing accurate
and accessible land data.
Capital Gains Tax Adjustments
The increase in the long-term capital gains tax rate to 12.5% from 10%,
along with a new exemption limit of ₹1.25 lakh per year, and the rise in the
short-term gains tax rate to 20% from 15%, will have a mixed impact. Real
estate which had a 20% LTCGT so far will benefit. CREDAI-MCHI looks forward to
collaborating with the government and other stakeholders to implement these
plans effectively and drive the real estate sector towards a prosperous
future.”
Mr. Rohit Gera, Managing
Director, Gera Developments:
“The move to align long term capital gain tax for real estate with other
financial assets is a positive move and will make investment in real estate
more attractive. Eliminating indexation will hurt people who have long
term investments in real estate."
Mr. Hemant Sapra, President,
Global Sales & Marketing, KARAM Group:
“We appreciate the government's comprehensive focus on MSMEs and the
manufacturing sector in this year's budget. The Credit Guarantee Scheme for
MSMEs in the manufacturing sector is a significant step towards empowering
small businesses with essential financial support without collateral. The new
assessment model for MSME credit and mechanisms for credit support during
stress periods are commendable initiatives that will help businesses maintain
operations and avoid becoming NPAs.
Additionally, reducing the turnover threshold for mandatory onboarding
on the TReDS platform from Rs 500 crore to Rs 250 crore will unlock vital
working capital for MSMEs, ensuring smoother cash flows. Enhancing the Mudra
loan limit to Rs 20 lakh for those who have previously availed and successfully
repaid loans under the Tarun category will provide additional support for
business expansion. Expanding SIDBI coverage to 168 clusters and opening 24 new
branches in MSME clusters within three years are positive moves to enhance
direct credit access.
Moreover, the budget's focus on substantial hiring of first-time
employees in the manufacturing sector is particularly encouraging. Corporate
employers and non-corporate entities with a three-year EPFO contribution track
record will be eligible, provided they hire at least 50 previously non-EPFO
enrolled workers or 25% of the baseline, whichever is lower. This initiative
will significantly boost employment and support economic growth. Overall, these
measures are poised to strengthen the MSME sector, boost employment, and ensure
sustainable growth.”
Mr. Nitin Gupta, Founder and
Managing Director, Maestro Realtek:
“The Union Budget 2024-25 has charted a progressive course for the real
estate sector, promising substantial benefits for urban regions. The budget's
comprehensive framework targets critical areas such as affordable housing,
urban infrastructure, and digital transformation, setting the stage for
significant advancements in the real estate market.
A notable highlight is the allocation of ₹10 lakh crore under the
Pradhan Mantri Awaas Yojana (PMAY) for urban housing, poised to address the
housing shortage and stimulate the affordable housing segment. The emphasis on
Transit-Oriented Development (TOD) for major cities will enhance connectivity,
reduce congestion, and promote sustainable urban growth.
The establishment of industrial parks through public-private
partnerships is another strategic initiative, expected to bolster industrial
development and generate employment. The provision of rental housing for
industrial workers via the Viability Gap Funding (VGF) model addresses a
crucial need for affordable accommodation, supporting the workforce essential
to the economic ecosystem.”
Mr. Gautam Rajgarhia, Pro Vice
Chairman, DPS Varanasi, Nashik, Lava Nagpur, and Hinjawadi:
“The government's allocation of Rs 1.48 lakh crore for education,
employment, and skilling is a transformative move that will significantly
impact the sector. This investment, aimed at training 20 lakh youth and
upgrading 1,000 institutes, is especially beneficial for those pursuing
vocational routes. It equips individuals with practical skills, fostering
excellence in their fields and integrating more youth into the formal economy.
The establishment of manufacturing bases in or near districts reduces the need
for urban migration, promoting hyper-local job creation and bolstering the
manufacturing sector. These initiatives are pivotal in driving India towards
becoming a $10 trillion economy within the next 7-10 years.
Furthermore, the model skill loans scheme, which provides aid of up to
Rs 7.5 lakhs, is set to benefit over 25,000 students. Current education loan
policies already offer loans up to Rs. 7.5 lakhs without collateral and Rs. 4
lakhs without a co-applicant, aligning institute fees with these amounts.
However, addressing employability concerns remains crucial. Additional
measures, such as Rs. 10 lakh loans for higher education, e-vouchers for 1 lakh
students, and internships with a Rs. 5,000 monthly allowance from top
companies, provide comprehensive support. This holistic approach empowers
youth, supports startups, and fosters sustainable growth, ensuring that all
segments of society benefit from India's evolving
economic landscape."