Budget 2018: Affordable Housing Gets A Fund Of Its Own

The focus of the Prime Minister Narendra Modi-led government became clear as Finance Minister Arun Jaitley tabled the Union Budget 2018-19 on February 1. The clearly proonounced priorities of the government are agriculture and health.  While not many direct incentives have been announced for the real estate sector, it could benefit from various infrastructure projects announced in Thursday's Budget. One thing is also clear, the government is quite serious about meeting the Housing-for-All-by-2022 target, PM Modi's pet project. 

Affordable housing is all set to get a dedicated fund under the National Housing Bank (NHB). Building  affordable housing is a key priority of the government. In the urban areas alone, about 31 lakh homes are to be built in the financial year 2018-19 while rural areas would see the construction of 51 lakh affordable units. Jaitley also added, “Persons belonging to poor-and middle-class category are also being provided a great relief in interest rates on housing schemes.”

Aniket Haware, managing director, Haware Builders, says, “Affordable housing, where the real deficit exists, saw an encouraging boost with the creation of a dedicated Affordable Housing Fund by the NHB to address the issue of funding constraints faced by all stakeholders. The GST rates should have come down for the real estate that would have helped middle-income group from pricing point. Except tax benefit for the slab from Rs 2.5 lakh to Rs 5 lakh, no announcement is made related to housing loan, interest rate, etc.”  

No incentives to private real estate bodies

On the other hand,  Sarjan Shah, MD, Group Satellite, says, “A disappointing Budget from the perspective of private sector involvement in creating mass housing stock that will make homeownership a reality for all Indians. The Budget has unfortunately ignored the stressed and vilified real estate sector that is in desperate need of government support through specifically targeted tax breaks that help make building affordable homes in India viable.”  

Boost through technology

However, just the intent and funds might not be the only requirements as Sameer Nayar, founder and chief executive officer at BuildSupply puts it. “ The boost for affordable housing is commendable. The country has a serious shortage of housing units and this will go a long way in addressing that. Technology is the need of the hour to execute on the government's vision. One cannot build at that scale without using a tech-enabled comprehensive resource planning system. Most real estate companies in India are still slow in adapting tech. There is a dire need to pace-up given the intense focus on affordable housing and digitisation being a core enabler of these grand infrastructure schemes.”