Budget 2023 prioritized urbanization and affordable housing. The funding for the government’s flagship program, the Pradhan Mantri Awas Yojana (PMAY), has been boosted by 66% to Rs 79,000 crore. A total of Rs 25,103 crore has been allotted to PMAY Urban to accelerate the Housing for All initiative.
While this will undoubtedly help affordable housing, which had been struggling due to rising input costs and homebuyers still reeling from the effects of the pandemic, there were no significant direct announcements for the real estate sector that could be viewed as ‘immediate booster shots,’ according to real estate experts.
The long-awaited direct tax cuts and modifications to income tax bands are projected to put more money in the hands of middle-class people, boosting spending capacity and saving. Real estate experts believe this should augur well for the residential market, remarkably inexpensive homes.
According to them, the 66 percent increase in PMAY spending to Rs 79,000 crore will directly impact the creation of affordable homes and help close the country’s housing deficit.
Sitharaman announced the establishment of an Urban Infrastructure Development Fund (UIDF) with a yearly grant of Rs 10,000 crore to improve infrastructure in tier-2 and tier-3 cities.
The National Housing Bank will oversee the UIDF, which will be structured similarly to the Rural Infrastructure Development Fund (RIDF). According to the finance minister, state agencies would use the monies to build urban infrastructure in tier 2 and 3 cities. Sitharaman also said that urban planning reforms would be supported to allow transformation into “sustainable cities of tomorrow.”
“This entails effective land use, enough funding for urban infrastructure, transit-oriented development, increased availability and affordability of urban land, and possibilities for everybody,” she explained.
The budget also focuses on improving urban infrastructure, which is essential for the overall development of urban areas. The government has allocated INR 25,000 crores to develop urban infrastructure, which will support the construction of new roads, bridges, and other essential services. This will help reduce traffic congestion, improve air quality, and provide citizens access to critical services.
In conclusion, the Union Budget 2023 focuses on urbanization and expediting the Housing for All program to provide housing to all citizens by 2023. The budget provides the following:
- Financial support for the development of smart cities.
- The improvement of urban infrastructure.
- The construction of new townships.
This will help the overall development of urban areas and provide citizens with a better quality of life.