Will Budget 2020 Revive the Realty Sector?
Budget 2020 has come up with several surprises for the real estate sector, and the common man.
For real estate, it is not just about RERA, but also the expansion of new segments in real estate industry which have the potential to change the narrative. As per the Indian Finance minister, Nirmala Sitharaman, India is set on the path to becoming a $5 trillion economy by the year 2025. This goal might be difficult to achieve, however, focusing on the right avenues, may help to achieve.
Real estate sector has an extensive impact on the country’s economy; the reason is because of its sheer size, national reach, tax contribution, generation of employment and contribution to the overall GDP. That’s the reason why the industry alone is set on the target of reaching a market size of $1 trillion by 2030. Furthermore, by the year 2025, it hopes to account for at least 13% of the country’s GDP.
However, in recent years, it is observed that the pace of growth for the Indian real estate sector has considerably slowed, owing to a few important factors. It consists of a widespread reduction in demand, issues with liquidity as well as high inventory. Thus, Budget 2020 has its task more than cut out for itself. To revitalize the industry, there are quite a few expectations from the Budget to deliver some much- needed relief to both developers and homebuyers.
Industry Status for Real Estate
Firstly, the developments that are anticipated from Budget 2020 are the official acknowledgment of the real estate sector as a full-fledged industry. Real estate is easily one of the largest contributors to the nation’s GDP and has been important in offering employment to people across the country. It will bring about changes in the provisioning norms for lending and help the sector secure finances at lower costs, especially in circumstances when funding is a major concern for the industry.
National Rental Policy
Secondly, a policy meant to meet the requirements of not just homebuyers but the overall housing demand of the Indian real estate is anticipated to be rolled out with Budget 2020. The National Rental Policy focuses on creating a sustainable and inclusive rental housing market in India.
Undertaking liquidity issues
Last but most importantly, the real estate sector will be looking to Budget 2020 to solve its fairly urgent troubles with liquidity. Especially, the sector as a whole has been reeling from the impact of the Non-Banking Financial Companies (NBFC) liquidity crisis. NBFCs have always been relied upon by builders and developers as a lending source, but with the recent NBFC capital crunch, a number of under-construction projects have been stalled.
Hoping that Budget 2020 will help resolve the liquidity crisis at its source, at the NBFC level, and help uplift both industries. Important steps like allocating separate funds for the completion of stalled projects, as well as increased tax incentives for affordable housing projects, can go a long way.
Even as Budget 2020 introduces several specific and critical changes, above all, the Indian real estate sector hopes for a comprehensive approach to strengthening the industry. These bold reforms could successfully boost the real estate industry and actively revive the home buyer’s interest in the sector. Meanwhile, as a potential buyer for a home, you need to seek an investment opportunity that can reap the right rewards and assist you to save for your dream home.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. Propertypistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
