” Interim Budget 2024 introduces key infrastructure plans, potentially driving real estate growth in Tier II and III cities “
Finance Minister Nirmala Sitharaman’s recent budget announcement signals positive developments for real estate, particularly in smaller cities. The budget includes allocations for expanding airports and railway corridors, along with a substantial capital expenditure increase to Rs 11.11 trillion.
Although the interim budget didn’t outline specific measures for Tier II and III cities, the earlier Gati Shakti initiative and the emphasis on infrastructure and technology are expected to stimulate real estate activity in these areas.
Infrastructure Impact: Vivek Rathi from Knight Frank India notes potential benefits for industrial, warehousing, and retail sectors, with increasing consumer demand in Tier II and III cities. The budget’s focus on urban infrastructure development could enhance living conditions, attracting residents and businesses.
Affordable Housing Push: An increased allocation of Rs 80,671 crore for Pradhan Mantri Awas Yojana (PMAY) is seen as a boost for affordable housing. Continued government focus on schemes like PMAY is expected to spur construction activity, benefiting developers and buyers in smaller cities.
Economic Corridors’ Role: The introduction of economic railway corridors is deemed crucial for reducing logistics costs in the country, making India more competitive globally. Nesara BS of Concorde sees these corridors benefiting ancillary industries like real estate, especially in developing warehousing and logistics hubs.
Technological and Tourism Emphasis: Sitharaman’s budget speech highlights a significant corpus for private sector research and innovation, aiming to encourage growth in sunrise domains. Prateek Mittal of Sushma Group sees this as a major boost for commercial realty in Tier II and III cities.
The budget’s tourism development initiatives are expected to have a multiplier effect, fostering real estate and infrastructure growth in smaller cities, according to Dr. Samantak Das of JLL.