Industry experts in real estate, manufacturing, education praise Modi 3.0 government’s Viksit Bharat Budget 2024

Domnic Romell, Chairman of CREDAI-MCHI, commends the government for presenting a Viksit Bharat Budget that focuses on simplification and digitalised infrastructure

India: Finance Minister Nirmala Sitharaman today unveiled the first budget of the Modi 3.0 government. Here are the reactions of experts from the real estate, education and manufacturing sectors.

Mr. Domnic Romell, Chairman, CREDAI-MCHI, the apex body of the real estate sector in Mumbai Metropolitan Region (MMR):

“The Union Budget 2024-25 has provided a comprehensive and ambitious vision for the real estate sector, which will particularly benefit urban centres like Mumbai. CREDAI-MCHI finds various aspects of the Budget very encouraging and potentially transformative. The Union Budget 2024-25 presents a robust framework for the growth and development of the real estate sector. The emphasis on affordable housing, urban infrastructure, industrial development and digitisation are particularly beneficial for a dynamic and densely populated city like Mumbai. CREDAI-MCHI is optimistic about the opportunities these initiatives will bring to the real estate sector and the economy.

Incentive for affordable housing

The announcement of construction of 3 crore houses under the Pradhan Mantri Awaas Yojana (PMAY) in both rural and urban areas is a major step towards addressing the housing shortage in India. In particular, the allocation of ₹10 lakh crore to meet the urban housing needs of 1 crore individuals under PMAY will give a much-needed boost to the affordable housing segment in Mumbai. This huge investment is likely to boost demand, making home ownership a reality for many and spurring growth in the sector.

Urban development and infrastructure

The Budget’s focus on Transit-Oriented Development (TOD) for 14 major cities, including Mumbai, is a game-changer. TOD schemes will not only improve connectivity and reduce congestion but also enhance the liveability and attractiveness of urban areas. By integrating residential and commercial spaces with public transport networks, Mumbai can look forward to more sustainable and efficient urban development.

Industrial estates and job creation

The development of industrial parks with complete infrastructure in partnership with state and private players in 100 cities, including the 12 parks under the National Industrial Corridor Development Programme, is a strategic move. This initiative will boost industrial growth, create employment and stimulate economic activity. For Mumbai, known as a financial and commercial hub, these developments will enhance its industrial and logistics capabilities.

Rental properties and housing for employees

The provision of dormitory rental housing for industrial workers through the Viability Gap Funding (VGF) model is a commendable initiative. This addresses a critical need for affordable, decent housing for the workforce, which is essential for sustaining Mumbai’s industrial and manufacturing sectors.

Stamp duty and purchase of real estate

Encouraging states to moderate high stamp duties and consider reducing the duty for property purchases by women is a progressive step. In a city like Mumbai, where property prices are among the highest in the country, reducing stamp duties can make property transactions more affordable and stimulate market activity. Moreover, promoting gender equality by reducing the duty for women buyers is a socially responsible step. CREDAI-MCHI has been advocating for the same for a long time and we are glad that our prayers have been answered.

Digitization of cadastral data

Digitization of land registry data in urban areas with GIS mapping and an IT-based system will significantly improve transparency and efficiency. For developers in Mumbai, this will mean smoother and more secure transactions, reducing the risks associated with property disputes and unclear titles. It will also facilitate better urban planning and management by providing accurate and accessible land data.

Capital gains tax adjustments

The increase in the tax rate for long-term capital gains from 10% to 12.5%, along with a new exemption limit of ₹1.25 lakh per annum and the increase in the tax rate for short-term capital gains from 15% to 20%, will have a mixed impact. Real estate that has had an LTCGT of 20% till now will benefit. CREDAI-MCHI looks forward to working with the government and other stakeholders to implement these plans effectively and lead the real estate sector to a prosperous future.”

Mr. Rohit Gera, Managing Director, Gera Developments:

“The move to align long-term capital gains tax on real estate with other financial assets is a positive step and will make real estate investment more attractive. Removing indexation will hurt people who have long-term investments in real estate.”

Mr. Hemant Sapra, President, Global Sales & Marketing, KARAM Group:

“We appreciate the government’s extensive focus on SMEs and the manufacturing sector in this year’s budget. The credit guarantee scheme for SMEs in the manufacturing sector is a significant step towards empowering small businesses with essential collateral-free financial support. The new SME credit assessment model and credit support mechanisms during stressed periods are commendable initiatives that will help businesses sustain their operations and avoid becoming NPAs.

Moreover, lowering the turnover threshold for mandatory onboarding on the TReDS platform from Rs 500 crore to Rs 250 crore will free up essential working capital for SMEs, ensuring smoother cash flows. Increasing the Mudra loan limit to Rs 20 lakh for those who have previously availed loans under the Tarun category and successfully repaid them will provide additional support for business expansion. Expanding SIDBI coverage to 168 clusters and opening 24 new branches in SME clusters within three years are positive steps to improve direct access to credit.

Moreover, the focus of the Budget on substantial hiring of new workers in the manufacturing sector is particularly encouraging. Corporate employers and non-corporate entities with three years of EPFO ​​contribution history are eligible, provided they hire at least 50 previously non-EPFO registered workers or 25% of the baseline, whichever is lower. This initiative will significantly boost employment and support economic growth. Overall, these measures are poised to strengthen the MSME sector, boost employment and ensure sustainable growth.”

Mr. Nitin Gupta, Founder & Managing Director, Maestro Realtek:

“The Union Budget 2024-25 has set a progressive course for the real estate sector, promising significant benefits for urban regions. The budget’s comprehensive framework focuses on critical areas such as affordable housing, urban infrastructure and digital transformation, and lays the foundation for significant progress in the real estate market.

A notable highlight is the allocation of ₹10 lakh crore under the Pradhan Mantri Awaas Yojana (PMAY) for urban housing, poised to address the housing shortage and boost the affordable housing segment. The emphasis on Transit-Oriented Development (TOD) for major cities will improve connectivity, reduce congestion and promote sustainable urban growth.

The establishment of industrial parks through public-private partnerships is another strategic initiative, which is expected to boost industrial development and generate employment. The provision of rental housing for industrial workers through the Viability Gap Funding (VGF) model addresses a critical need for affordable housing, supporting the workforce that is essential to the economic ecosystem.”

Mr. Gautam Rajgarhia, Pro Vice Chairman, DPS Varanasi, Nashik, Lava Nagpur and Hinjawadi:

“The government’s allocation of Rs 1.48 lakh crore for education, employment and skills is a transformative step that will have a significant impact on the sector. This investment, aimed at training 20 lakh youth and upgrading 1,000 institutes, is particularly beneficial for those pursuing vocational training. It equips individuals with practical skills, promotes excellence in their field and integrates more youth into the formal economy. Locating manufacturing bases in or near districts reduces the need for urban migration, promotes hyperlocal job creation and strengthens the manufacturing sector. These initiatives are crucial to growing India to a $ 10 trillion economy within the next 7-10 years.”

Additionally, the model skill loans programme, which provides up to Rs 7.5 lakhs in assistance, will benefit over 25,000 students. The current education loan policy already offers loans of up to Rs 7.5 lakhs without collateral and Rs 4 lakhs without co-applicant, with tuition fees aligned to these amounts. However, addressing employability concerns remains critical. Additional measures such as Rs 10 lakh loans for higher education, e-vouchers for 1 lakh students and internships with a monthly stipend of Rs 5,000 from top companies provide comprehensive support. This holistic approach empowers youth, supports startups and promotes sustainable growth, ensuring that all segments of society benefit from India’s changing economic landscape.”