Budget 2024: Molding Affordable Housing Priorities in India, Says Avneesh Sood, Director at Eros Group
The real estate industry in India stands at a pivotal juncture as it anticipates the contours of Budget 2024, especially concerning the paramount issue of affordable housing. In the face of persistent challenges and a dynamic economic landscape, the need to reshape priorities for affordable housing has never been more pressing.
The forthcoming budget holds the potential to chart a transformative course for this critical sector, and the expectations are anchored in the latest industry reports and compelling data. Affordability concerns, rising construction costs, and the demand for strategic policy interventions form the backdrop of this discourse.
Affordability Concerns and Market Dynamics
It is imperative to dissect the nuances of the current state of affordable housing, emphasizing its significance and shedding light on the key challenges that necessitate a recalibration of priorities in Budget 2024.
- The real estate industry in India faces a critical juncture, particularly when it comes to addressing the pressing issue of affordability in housing.
- Analyzing the affordability gap in major cities reveals a stark reality, with Mumbai facing a significant challenge for prospective homebuyers.
- Rising construction costs, as evident from recent data on increases in cement, steel, and sand prices, add strain to developers’ margins, making it challenging to deliver affordable housing units.
Industry Expectations and Recommendations
In anticipation of Budget 2024, the Indian real estate industry articulates crucial expectations and recommendations that are vital for reshaping affordable housing priorities.
- Advocacy for a revision in the Pradhan Mantri Awas Yojana (PMAY) price ceiling, particularly in large cities, to address affordability challenges.
- Calls for additional tax benefits and subsidies for developers involved in affordable housing projects to incentivize their contribution to the government’s vision of Housing for All.
- Advocacy for streamlining land acquisition processes tailored for affordable housing projects to expedite development.
Budget 2024 Expectations and Key Data Points
Navigating the intricate landscape of affordable housing, the expectations for Budget 2024 are underscored by both demand trends and the formidable challenges confronting the sector.
- The industry emphasizes an increased budgetary allocation, urging a rise from the current Rs 79,000 crore to at least Rs 1 lakh crore to address challenges.
- Extension and revamp of tax breaks for developers and homebuyers in the affordable segment, including higher deduction limits on home loan interest, income tax exemptions, and GST rationalization.
Future Prospects and Considerations
The future prospects of reshaping affordable housing priorities in India demand a nuanced understanding of city-specific and state-level data.
- Analyzing top-performing states provides valuable insights into the growth trajectories of affordable housing sales in 2023, reflecting the influence of lower land costs and increasing job opportunities.
- Policy changes, including the Pradhan Mantri Awas Yojana (PMAY) and a reduced GST rate, have had a profound impact on the affordable housing sector.
The path forward for reshaping affordable housing priorities in India requires a holistic approach that integrates city-specific data, state-level insights, policy continuity, innovation, and sustainability. As the industry continues to navigate challenges and opportunities, strategic policymaking, fiscal support, and a collaborative approach between the public and private sectors will be instrumental in realizing the vision of affordable housing for all in India.
The Writer is Mr. Avneesh Sood, Director Eros Group