Union Budget 2017 was announced by Finance Minister Arun Jaitley on Wednesday- 1 February, 2017. Among other favourable initiatives for real estate announced by Mr. Jaitley, giving infrastructure status to affordable housing came out as a showstopper. It has not only paved the way for the growth of real estate but has also given a big fillip to PM Modi’s ‘Housing for All by 2022’ scheme.
Giving infrastructure status to real estate was a much debated topic in the last two budgets. Now that it has finally been approved, both homebuyers and developers are in a cheerful mood.
Having an infrastructure status, developers of low-cost housing projects will now be able to get several benefits by the government such as subsidies, institutional funding, etc. Foreign investors are also expected to show renewed interest in affordable housing market; foreign funds will be available to developers at cheaper costs. Further liberalisation of FDI policy is also under consideration which will pave the way for its growth. Foreign Investment Promotion Board (FIPB) will also be abolished in 2017-18.
Apart from this, FM Arun Jaitley also gave clarity on the definition of affordable housing. ‘Carpet area’ of homes (30 sq m to 60 sq m) will be counted for getting benefits of affordable housing, instead of the built up area, which is an area increase of about 20 percent. Moreover, the sops for affordable housing have been extended to five years from three years.
Infrastructure status for affordable housing gives a major push to real estate. This move, when combined with the benefits of other favourable initiatives will definitely revive Indian real estate in the coming time.