The Government's move to take over NHB from RBI will translate into NHB's focus shifting from regulation to development.
Demonetization, Benami Properties Act, RERA, and GST – having laid the foundation for a more transparent and organized real estate, it was expected that the Finance Minister would look at real estate as a GDP multiplier as also a job creator. We expected lowering of GST rates, enabling single window clearance and according to industry status to real estate. If these had been included, we would have looked at real estate contributing positively to economic growth in terms of being a job creator as also to ensure growth in the country's GDP.
That this might not happen was something that occurred to me when Arun Jaitley said, while starting his speech, that the Budget would focus on agriculture and the rural economy. He did not disappoint, with what has largely turned out to be a 'Socialist' budget, one that is good for the economy – but somehow seems to have missed out on the positives that focus on real estate would have brought.
The Finance Minister focused on a roof for one's family, terming it 'another concern of the poor'. He said the poor only desire to have a roof, a small house by an earning of honesty, adding that the government was helping them fulfil the dream. Reiterating the target of 2022, the Finance Minister said the Prime Minister Awas Yojana (PMAY) had been launched and 51 lakh houses in 2017-18 and 51 lakh houses in 2018-19 — adding up to more than a crore houses – will be constructed exclusively in rural areas. In urban areas, assistance has been sanctioned to construct 37 lakh houses, he added.
The establishment of a dedicated Affordable Housing Fund, under the National Housing Bank (NHB) — funded from priority sector lending shortfall and fully serviced bonds authorized by the Government – could drive major real estate companies to look at affordable housing as a viable business opportunity.
From a real estate perspective, the Budget held little to write home about: The Government's move to take over NHB from RBI will translate into NHB's focus shifting from regulation to development. The Finance Minister, towards the end of his speech, mentioned reducing hardships faced in realty deals. This is also a 'positive'.
Targets of Swachh Bharat, rural electricity and LPG connections have been increased substantially, which is a positive. The knowledge take-away from the speech: The Government is shifting focus to 'ease of living' after successfully focusing on 'ease of doing business'.
Despite having missed out on real estate, I rate the Budget at 7 — and for obvious reasons: Arun Jaitley has managed to balance populist demands, the need to support economic growth as also Prime Minister Narendra Modi's focus on fiscal discipline and reforms.
By Dr Niranjan Hiranandani, President, National Real Estate Development Council
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