India’s property sector is set to benefit from the country’s recent federal budget, which was presented on February 1st.
The budget has increased confidence in the sector, which had dropped since India’s demonetisation move in November, when the Indian government banned 1,000- and 500-rupee banknotes in a bid to tackle the country’s problem with black money.
Shishir Baijal, the chairman and managing director of Knight Frank India, said:
“This has been one of the path-breaking budgets with far-reaching changes especially for the real estate sector. This has come at a time when the beleaguered sector has been looking at measures to boost the sentiments.”
In addition to moves to help enhance the affordable housing sector (including granting it infrastructure status to improve access to cheaper financing), there were a few other announcements made during the budget that are expected to have a positive effect on the property industry.
“Increased focus on infrastructure – especially construction of new roads, improvement of existing roads and coastal connectivity – will go a long way to benefit the real estate sector,” continued Baijal.
Arun Jaitley, India’s finance minister, has also announced the abolition of the Foreign Investment Promotion Board, a bureaucratic agency that was complicating the process for foreign direct investment (FDI). It is anticipated that this move will also benefit the real estate sector.
“While a clear policy outline is yet to be revealed, this is another positive step to liberalise FDI policy framework and ease regulatory hurdles in attracting investments,” commented Anshuman Magazine, the chairman of CBRE for India and South-east Asia.
Indian property stocks are already increasing as a result of the positive budget.