By Niranjan Hiranandani
Budget 2023 proved truly equitable and progressive, by balancing fiscal concerns with economic growth. India has prudently steered itself amid global and economic headwinds while retaining the tag of the fastest-growing economy.
The Centre has addressed the needs of all strata of the economy by tax rationalisation. It has ensured that the middle class has more disposable income with it. The income tax exemption rebate being increased to Rs 7 lakh will provide relief to a broad spectrum of taxpayers. Reductions in personal taxes will give potential homebuyers additional disposable income. The Centre has also shown that it is equally serious in its vision to become a $5-trillion economy, which is not possible without proper infrastructure. The government has increased its total capital expenditure on infrastructure development by 33%—or 3.3% of the GDP, at Rs 10 trillion. This is a tremendous move forward as it helps India become a self- reliant nation.
The government is also keen on providing housing for all and has increased the funding for the Pradhan Mantri Awas Yojana (PMAY) initiative, which has seen a substantial 66% increase in allocation, from Rs 47,500 crore in FY23 to Rs 79,000 crores in FY24. This allocated amount is expected to cover more than 55% of the estimated deficit in funds for projects under the scheme. I believe this step will provide housing to those in need and bridge the gap between those without access to adequate housing and those with access. This subsidy will ensure that urban and rural homes are constructed within the designated time-frame and meet established standards.
With extended interest-free loans of 50 years to state governments, and a 33% increase in outlay, this budget focuses on bolstering infrastructure development.
The government has also set its sights on developing 100 essential transportation and infrastructure projects for seamless connectivity, creating 50 new airports, heliports, and aerodromes for regional transportation, and expanding the government’s capital outlay by Rs 2.4 trillion to boost rural accessibility. These initiatives would go a long way in improving rural connectivity and creating additional employment opportunities.
Investing in last-mile connectivity can drastically reduce logistics costs, helping improve India’s international competitiveness and investment potential. Enhancing infrastructure is essential for job creation and opens up rural areas across the country for real estate development. Establishing an Urban Infrastructure Development Fund overseen by the National Housing Board will ensure efficient execution and timely completion of projects in the PPP mode.
The proposed withdrawal of capital gains tax benefits on properties with values exceeding ’10 crore will disincentivise families from investing in multiple properties for the security of their children. In order to better equip its workforce for the highly labour-intensive real estate sector, emphasis on skilling will cultivate a research- and knowledge-based economy. This will help develop job-ready, skilled manpower. The measures taken by the government on digital adoption and green economy indicate a movement towards sustainable development on a war footing.
The steps to bolster the MSME sector with an additional pool of Rs 2 trillion for collateral-free loans while reducing the cost of credit by 1% will definitely fuel entrepreneurial spirit in India. The government has also taken steps towards inclusive development, such as establishing an Agriculture Accelerator Fund to foster agri-startups and enhance digital public infrastructure. This will provide farmers with crop planning and storage solutions suited to their needs. Setting an ambitious agricultural credit target of Rs 20 trillion by 2024, this plan emphasises animal husbandry, dairy, and fisheries—all of which have the potential to strengthen the economy.
(National vice-chairman, NAREDCO, and MD, Hiranandani Group)