PM Modi Ideas will Push the Realty in India

Bangalore: Prime Minister of India, Narendra Modi took an initiative to extemporize the budget as his key motive. From the time he sat on the throne of Prime Minister, he was emphasizing for the development of Infrastructure, employment and women’s safety. With the aim of development, Narendra Modi has statured a plan to put four ministries on top gear i.e. Railways, Roadways, Civil aviation and shipping. This infrastructure development is expected to push the realty in India and is to change the urban landscape of India.

The PM concept of building 100 smart cities is going to be a reason for boost of realty in India. Cities which are driven by smart practices, smart mobility, smart technology and energy efficient with overall infrastructure and sustainable real estate market are now being planned and some are under progress to offer better quality of life. The NDA government allocated 7060 crore for the development of smart cities and for redeveloping satellite towns of major cities.

In Budget day speech, the finance minister Arun Jaitley stated that “the proposed smart cities will be developed as satellite towns of largest cities and by modernizing the existing mid sized cities.” With a concept on “Housing for all” he has allocated Rs 4000 crore through the National Housing for the urban poor to affordable housing and plans to extend incentives for housing loans.

Impact of smart cities on real estate: Increase in investment level of section 80 C and deduction limit of interest on the loan will help home buyers with more income in hand encouraging them to invest in real estate.

FDI Investments: A reduction of built up area for FDI investments from 50,000 sq m to 20,000 sq m and halving the capital of $ 10 million to $ 5 million for the development of smart city will allow less capital to flow faster. Smaller projects can raise money through FDI boosting affordable boosting. This will push a lot of focus on affordable housing.Projects with a 30 percent of total project cost allocated to affordable housing will get an exception from minimum built up area and capitalization requirements.

REITS: REIT (Real Estate Investment Trust) is also a positive move as it is an investment vehicle which allows investors to participate in real estate growth without investing directly. It will help in easing liquidity requirement for developers.