Finance & Economy | Industry And Cluster

Savills India’s reaction and analysis of the Union Budget for 2023–24

Published: February 3, 2023
Author: TEXTILE VALUE CHAIN

“The 2023 Union Budget is a testament to the government’s commitment to inclusive growth, with a focus on strengthening the country’s infrastructure, empowering the rural sector, and driving innovation for a better tomorrow. Although the real estate sector did not feature prominently in the budget, derived benefits are likely to give further boost to the sector especially in these times of a ‘Robust Growth Phase’ post the pandemic affected years of 2020 and 2021.

A steep rise in Capex to 3.3% of GDP continues to be the guiding force of the budget, providing a strong impetus to infrastructure and allied sectors. Commercial real estate and manufacturing sector will get derived benefits with focus on green technologies in automotive sector. Furthermore, with an annual allotment of INR 10,000 cr towards Urban Infrastructure Development Fund, real estate growth in Tier II and III cities of the country is expected to pick up significant pace. In our recent discourses and publications, we have repeatedly highlighted India’s need for creating a large pool of urban centres. Simialrly, Life sciences sector, which is a key to India’s future economic growth, stands to benefit from a new program for pharmaceuticals, as research gains greater attention. The Budget has also focused on the development of GIFT City which will boost the growth of the financial sector, creating job opportunities and promoting economic development.

Direct real estate announcements, although scant this time, included enhanced allocation to the PM Awas Yojana. With a 66% increase in allocation, the total fund outlay touches INR 79,000 cr. The much-awaited direct tax benefits and changes to the income tax slabs are likely to put more money in the hands of middle-class households, positively impacting spending capacity and savings. This should bode well for the residential segment, especially affordable housing.” – Anurag Mathur, CEO, Savills India

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