Union Budget 2023: Growth oriented with long-term view of social development

The union budget presented today by the honourable Finance Minister is growth oriented and with a long- term view of social and infrastructure development. The budget is cognizant of the need to empower the different segments of the economy and the society. In doing so, the allocations for the various infrastructure developments are very critical. The massive 33% increase to INR 10 lakh crore outlay toward infrastructure investment and the 66% increase in the outlay toward affordable housing via the PMAY shows that the budget has planted its foot firmly forward on the growth agenda. This has been attended while providing a fiscal consolidation road map which would cheer the financial markets too.

• BOOST TO AFFORDABLE HOUSING

It is a great measure to increase the outlay towards Pradhan Mantri Awas Yojna (PMAY) which will help continue the momentum in the affordable housing for the country. The increase by over 66% to INR 79,000 cr. in the outlay will help in expediting the housing for all programme.

• BIG PUSH TO INFRASTRUCTURE

The government continues its commitment to infrastructure development of the country. The significance of the budget allocation is that it covers all major segments including a record allocation for railways, transit-oriented developments, urban infrastructure, waterways, ports, airports etc.

• GREEN GROWTH

The emphasis on green growth with renewable energy, environmental conversation and matters of reforestation specially of the coastal areas are critical to note. The government has provided notable subsidies on import duties related to clean energy as well as handling of current material.

• TOURISM AND HOSPITALITY

The budget has been benevolent in creating the right growth environment for tourism and hospitality. Interestingly, the budget announcement has been inclusive in its nature to create more centres.

• INCREASED LIQUIDITY FOR INDIVIDUALS

The government has created more disposable income at the lower end and the middle income which will find ways into consumption in turn boosting the economic growth.

• IMPACT ON REAL ESTATE SECTOR

The 66% increase in outlay toward PMAY to INR 79,000 cr will directly impact the development of affordable housing and pare the housing gap that the country faces. The increase in income-tax slab limits will increase the disposal income and can be channelised toward funding a house property purchase. The infrastructure boosts will also indirectly benefit the real estate sector. Coupled with the impetus on transit - based infrastructure, there will be a further cause of growth benefiting the real estate sector in mid to long term.

Overall, the budget announcements are positive for consumption growth, infrastructure development and a step towards becoming an economy of global significance.

(Shishir Baijal is Chairman and Managing Director, Knight Frank India.)