The Union Budget 2021, touted as being one of the most important budgets in 100 years, is set to create new employment opportunities and act as an engine of global growth. Some of the Key measures and reforms announced for the Real estate and Smart city space in the Budget include:
- Jal Jeevan Mission urban to be launched with an outlay of INR 2,87,000 lakh crore over 5 years aiming at universal water supply in all 4,378 urban local bodies, with 2.86 crore household tap connections and liquid waste management in 500 AMRUT cities.
- Swachh Bharat Mission 2.0 with an outlay of INR 1,41,678 crores over 5 years from 2021 focusing on water waste treatment, source segregation, management of waste from urban construction, bioremediation of legacy dump sites
- In order to tackle the ongoing problem of thriving air pollution in cities, Budget 2021 proposed an amount of INR2,217 crores for 42 urban centres with a million-plus population
- A “National Monetization Pipeline” of potential Brownfield infrastructure is intended to be launched. Among other core infrastructure assets, Warehousing Assets of Central Public Sector Enterprises (CPSE) such as Central Warehousing Corporation and NAFED were proposed.
- Finance Minister Nirmala Sitharaman proposed to extend efforts over the One Nation One Ration Card scheme for the unorganised labour force migrant workers, by launching a portal that would collect information on gig, building and construction workers, among others, to formulate welfare schemes such as Health, Housing, Skill, Insurance, Credit, and food schemes for migrant workers
- Budget 2021 proposed to introduce Ujjwala scheme to be expanded over 1 crore more beneficiaries. The expansion would include an addition of 100 more districts in the next three years to the city gas distribution network and gas pipeline project in the newly formed UT of J&K
- Budget 2021 proposed to extend the eligibility of additional deduction of interest, amounting to Rs 1.5 lakh, for loans taken to purchase an affordable house as provided in the Budget of 2019-2020 by one more year, to March 31, 2022. The additional deduction of Rs 1.5 lakh shall therefore be available for loans taken up till March 31, 2022, for the purchase of an affordable house. This will help bring in new supply within the segment.
- The Budget also gave provision for tax exemption for notified affordable rental housing projects. This move is intended to ease migrant workers' life in cities by supporting them to remain in urban areas during times of financial distress.
- Reduction of customs duty to 7.5% on steel will be a boost to real estate developers as it will give them some headroom in easing pricing pressures.
- Budget 2021 proposed setting up a Development Financial Institution (DFI) called the National Bank for Financing Infrastructure and Development, which is expected to have a capital base of Rs 20,000 crore and will have a lending target of Rs 5 lakh crore in three years. This would enable FPIs to debt finance REITs, which would likely assist cash stressed real estate sector.
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