100 Days of NDA Government: Has it been acche–din (better days) for Indian Real Estate?
As Narendra Modi completed his 100 days at the centre, media and political analysts have hailed multiple achievements of his government. GDP growth of 5.7%, record performance of stock indices and the launch of Pradhan Mantri -Jan Dhan Yojana are a few signs of better days ahead. But will it be good days for real estate as well?
Our review of on the ground steps taken by the government makes us think so. We are listing the top initiatives which in our view will help real estate in the long run.
1. Diamond Quadrilateral Railway Program
The Modi government has outlined a significant plan for the expansion of the railway system in the country. Flagging the Diamond Quadrilateral Railway program, the government gave a green signal for the initial planning of a high speed (bullet) rail network connecting Chennai, Kolkata, Delhi and Mumbai. Preparatory works for the Delhi-Chandigarh-Amritsar corridor and the Pune-Mumbai-Ahmedabad route have already started. The introduction of 100% FDI in railways is another step towards the growth and development of infrastructure which will further help to revive the economy
2. Nagpur Metro
The arrival of the new government marked the forward movement of the Nagpur Metro Rail project. Receiving a nod from the Maharashtra government and an 'in-principle' approval by the Ministry of Urban Development in February 2014, the project got central government clearance in August and was allocated 86.8 billion in the Union Budget.
3. Lucknow Metro
The stalled Lucknow Metro Rail Project, which was proposed in 2008 received a budgetary allocation of Rs 100 crores and construction is likely to begin in September.
4. Highways and Expressways
The government approved highway projects worth 40,000 crores across the country in June 2014. Work will start on these projects in the next 3 months. Some of the key projects inaugurated in the first 100 days of the government are construction of a two-lane all-weather road joining Faridabad and Greater Noida over the Yamuna, building of a 290 km long highway between Solapur and Aurangabad and four-laning of the 160 km long National Highway from Kaithal to Rajasthan-Haryana border. There is a further plan to roll out another 2 Lakh crore worth of highway projects in this financial year itself.
5. Inauguration of SEZ at JNPT
On August 16, Modi laid the foundation of a port-based SEZ at the JNPT (Jawaharlal Nehru Port Trust) in Navi Mumbai. Sprawling over 277 hectares, the project will be home to hardware, engineering, electronics, non-conventional energy and other multi services sectors. The SEZ is anticipated to generate more than 1.5 lakh jobs and will give a major boost to the country's exports. Completion of this project will provide a fillip to Navi Mumbai real estate micro markets of Ulwe and Panvel where already an International Airport is being constructed.
6. Real Estate Investment Trusts and Infrastructure Investment Trusts
SEBI has approved guidelines for Real Estate Investment Trust (REITs) and Infrastructure Investment Trusts (InvITs) to encourage more private investment in infrastructure projects. In order to safeguard the interests of investors, SEBI has made it mandatory for the InvITs to make complete disclosure in terms of its listing agreements.
“The new government with its initiatives in the past 100 days has been able to create a new vigor in all sections of the economy including real estate. Inflation seems to have been brought under control, paving way for a possible interest rate cut in the near future which will help real estate to recover from the recession”, says Mr R K Arora, Chairman & Managing Director, Supertech Limited.
Mr Dhruv Agarwala, co-founder PropTiger.com adds, “I am happy with the initiatives taken by the Modi led NDA government for the infrastructure sector. However, we need to wait a little more to witness the desired results in the real estate sector.”
All the above initiatives point towards a positive intention of the government to plug the infrastructure gaps faced by our country. Completion of these infrastructure projects will not only help grow our GDP at faster pace but will also improve the lifestyle of our citizens. Eventually these initiatives will revive demand for real estate as people start looking out for new homes to match their improving lifestyles.
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