Table Of Contents
- Economic Growth After Union Budget #1: Will Inflation Be Addressed In The Union Budget 2023?
- Economic Growth After Union Budget #2: Should The Government Change the Affordable Housing Price Band?
- Economic Growth After Union Budget #3: Can The Affordable Housing Initiative Become Attractive Again?
- Economic Growth After Union Budget #4: Tax SOPs for Homebuyers & Investors
- Economic Growth After Union Budget #5: Will There Be Economic Growth After the Union Budget 2023?
The nation's eyes remain glued to every new information from the Central Government as they are set to present the Union Budget 2023 on February 1.
This may be the last budget from the current Government, but there are a lot of expectations and questions from the Union Budget 2023 that include:
- Will inflation be addressed in the Union Budget 2023?
- What is in store for the real estate industry in the upcoming Union Budget?
- Will there be any impact on economic growth after the Union Budget 2023?
Find answers to these questions and know what is in store for inflation, the economy, and the real estate industry.
Will Inflation Be Addressed In The Union Budget 2023?
In a chat with an esteemed economist, Eshwar Prasad, Union Finance Minister Nirmala Sitharaman spoke about the upcoming budget for 2023.
The Finance Minister said that India has been watchful of worldwide challenges like slow economic growth and high inflation.While the CPI inflation reduced to 6.8% year on year in October 2022, India will see around 7% growth in the current fiscal despite the slowing global economy, as stated by Nirmala Sitharaman in the chat. Adding to this, the Union Finance Minister said that inflation will have to be addressed and hence, carefully structuring a budget that contains inflation is crucial.
What Does the Upcoming Union Budget Will Have For the Real Estate Industry?
The real estate sector may have a few hopes as the industry continues to recover from the impact of Covid-19.
1. Should The Government Change the Affordable Housing Price Band?
Affordable housing is the growth engine for the real estate sector. As per an article by Financial Express, the current affordable housing price band is 45 lakhs. It means a property is affordable if its cost is 45 lakhs or less.
But if you check property prices in Mumbai or property prices in Delhi, this band may automatically seem too less. Increasing this band to more than 60-65 lakhs in major cities can benefit home buyers. The cost of 45 lakhs does not apply appropriately in all the cities. The change in the price band should be a consideration for Union Budget 2023.
2. Can The Affordable Housing Initiative Become Attractive Again?
A whopping 48,000 crore was allocated under PMAY urban and rural schemes in the Union Budget 2022. While the real estate industry is reviving, it did lose its shine even after this announcement due to Covid-19. Covid-19 impacted homebuyers economically; since then, the industry has been waiting and watching. These are the percentage of housing sales as per numbers mentioned in an article by the Times of India in 2022:
|City||Rise in housing sales|
These numbers are likely to increase. If the Union Budget 2023 could add some incentives for homebuyers, the industry could get back on its foot quicker.
Tax SOPs for Homebuyers & Investors
Home buyers & investors get a tax rebate of 2 lakhs on housing loans. There is a high possibility that it can increase the housing demand if this tax rebate is hiked to 5 lakhs, and there will be a growth in housing sales. Adding this to the Union Budget 2023 can give momentum to the real estate sector.
Will There Be Economic Growth After the Union Budget 2023?
Growth will be one of the main objectives of the Union Budget 2023. The World Bank's latest update suggested India's economy has withstood the external challenges. The Indian economy is expected to grow by approximately 7%, as per Nirmala Sitharaman.
The Central Government has estimated a reduction in the fiscal deficit to 6.4% in the next financial year. In the interview with Eshwar Prasad, the Finance Minister also revealed that the Government observed an increase in borrowing on behalf of the Centre and States. The Central Government aims to reduce the fiscal deficit to 4.5% by FY 25-26.
India's trade deficit has widened, and India's economy is recovering quickly even when there's a global slowdown, as per an article by Times of India. The Government of India will boost the economy by ensuring fiscal consolidation in the upcoming budget. In a Reuters conference, the Finance Minister, Nirmala Sitharaman, has quoted that India can look forward to a growing economy this year and next year. Also, India's current fiscal year's capital spending budget is 27% higher than last year's. The Finance Minister said the next budget via capital expenditure could guarantee good growth.
The Union Budget 2023 surely has a lot in store for all your inflation concerns, economic growth, and the real estate industry growth. We hope this blog helped you understand facts about all of them.
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