Budget 2020

Budget 2018 balanced for affordable housing, no direct impact on realty

Abhishek Law Kolkata | Updated on February 01, 2018 Published on February 01, 2018

The real estate sector sees Union Budget 2018 as a balanced one with focus on affordable housing; but, not having any direct impact on the sector.

As Anuj Puri, Chairman of Anarock Property Consultants, maintain: “Budget 2018-19 was balanced but Not a Boon for Real Estate.”

Little Direct Impact

According to Joe Verghese, Managing Director of Colliers International India, the Budget seems to be heading to have minimal direct impact on the Real Estate industry. This comes as a significant departure from the last three years.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, was more forthcoming. According to him, there has been a silence in the budget on stimulating mainstream real estate demand.

“The sector grappling with the reforms-driven new order has been bereft of any meaningful interventions that could have been achieved through the budget,” he pointed out.

In fact, Ramesh Nair, CEO and Country Head, JLL India, pointed out that no changes in Income Tax slabs or other direct measures that influence the sector were announced. Hence, the demand and supply dynamics of real estate sector get no further intervention.

“The sector was reeling for a while; and was expecting some big ticket announcements to revive it. This was from the perspective that real estate greatly contributes to the three economy (by contributing 7.7 per cent to GVA), employment (15 million job creation over 5 years) and exchequer,” he said.

Affordable Housing

However, some strengthening in affordable housing is expected to be witnessed.

As Santosh Rungta, former President of builders’ body, CREDAI, points out, there has been a continued push on affordable housing the setting up of an affordable housing fund is proof of that.

“The establishment of a dedicated affordable housing fund under the National Housing Bank for priority sector lending will provide a further impetus to the development of housing in this segment,” he said.

Union Finance Minister, Arun Jaitley, has announced the setting up of a dedicated Affordable Housing Fund (AHF) in National Housing Bank. It will be funded from priority sector lending shortfall and fully serviced bonds authorized by the Centre.

“Affordable housing looks like a good bet now. And in fact, the continued focus on smart city projects is expected to boost real estate activities further,” Rishi Jain, Director, Jain Developers said.

In fact, Ashish Jindal, Co-Head, Real Estate, Sanctum Wealth Management, is hopeful that this fund will help a few major real estate companies delve into the affordable housing segment as a viable business opportunity.

“The Budget has given a big relief by allowing upto a 5 per cent gap between the two and this has the potential to remove the irritant and revive secondary market transactions,” he said adding that the move may also help increase demand for housing.

Post demonetisation, the secondary market witnessed a bit of turbulence due to the absence of liquidity. Additionally, in major cities, the circle rates were increased and had become more than the market rates. This resulted in a gap between the two rates, which was counted as income in hands of both buyer and seller.

​ Rural Thrust

Another positive is the clear focus on pushing up farmers’ income thereby kick starting consumption in the economy.

According to Harshavardhan Neotia, Chairman, Ambuja Neotia Group and former President of FICCI, the budget lays a clear focus on increasing farmers’ income. This will boost consumption; which in return gives a fillip to the real estate sector.

“Real estate is a function of multiple parameters and bearing of the overall economy. So if there is an overall boost to the economy through farm spending and so on; then we will see a rub-off effect on the real estate sector,” he told BusinessLine.

Published on February 01, 2018

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.