The proposed Union Budget 2021-22 focuses on reviving the Indian economy, adversely impacted by the Covid-19 induced lockdowns, from a government estimated GDP decline of 7.7% in 2020. It takes the boldest steps to boost economic growth through government led investments in building real infrastructure, leading to the government’s target of 14.4% GDP growth in the coming fiscal year of 2021-22.
From a real estate perspective, the government continues to focus on affordable housing by extending income tax benefits to both the demand and supply side since this is the most underserved segment in housing. Further, the budget is aimed at unlocking capital tied up in stressed assets, inefficient public sector undertakings, and bank reserves against bad debts. At the same time, there is an opportunity for investors, with the priority to attract large volumes of institutional (including foreign) capital by providing more flexibility to REITs. Hence, we expect this year’s budget to have a steady and meaningful impact on the real estate sector’s fortunes over the next two years.
