To cater to the requirements of the neo-middle class, Union Finance Minister Arun Jaitley has sent a sweet message to developers and investors by way of thrust on Smart Cities.
The Budget proposes to encourage the development of Smart Cities by relaxing few concessions required such as built-up area and capital conditions for FDI, which has been reduced from 50,000 square metres to 20,000 square metres and from $10 million to $5 million, respectively, with a three-year post-completion lock-in.
Sanjay Dutt, Executive Managing Director, South Asia, Cushman and Wakefield said: “‘An allocation of ₹4,000 crore has also been made to NHB in order to build affordable homes in urban areas, ₹8,000 crore for rural housing and ₹7,060 to commence the development of the 100 ‘Smart’ cities that were promised by the PM in the pre-poll manifesto.”
“Formation of smart cities will mobilise employment, ensure development and create new real estate markets. We await the fine print of such initiatives to ascertain specific impact,” he added.
Shrinivas Rao, CEO-Asia Pacific, Vestian said: “Considering the substantial rural to urban migration within India, the development of 100 smart cities as satellite towns of larger cities and the modernisation of existing tier II and III cities is a progressive move for the nation. The budget by the new Government is duly supported with increase in home loan interest exemption, proposed uninterrupted power supply to all homes as well as tax incentives granted to REITs (Real Estate Investment Trusts) and Infrastructure Trusts to build infrastructure for improved connectivity. The FM has laid a prudent and planned road map ahead of us.”
As a property developer, Mr Jaishankar, CMD, Brigade Group said: “The budget has some positives by way of ₹4,000 crore given to the National Housing Bank to support affordable housing along with investment of ₹7,600 crore allocated to improve the infrastructure in 10 cities. In addition, the much awaited REITs will at last become a realty bringing in substantial funds to the commercial real estate sector. And extension of IT Section 80-IA benefits for three more years and renewed importance given to SEZs are positive steps.”
Shriram Properties’ Managing Director, M Murali said: “Finance Minister’s assurance to revive SEZ , allocation of ₹7,060 crore for 100 smart cities, planning metro cities with population of over 20 lakh and focus on urban infrastructure is commendable. Yet, there are several other long-awaited requests from real estate developers, such as industry status for real estates, encouragements in terms of tax sops and land allocation for taking up affordable housing projects, governance issues, etc.”
Anuj Puri, Chairman and Country Head, JLL India said: “This will have very positive implications for real estate across all segments, namely residential, commercial, retail and hospitality. Smart cities, by definition, imply considerable demand for technology-enabled services, and this is a big positive for IT/ITeS companies in India. Significantly, as much as one-third of the country’s demand for office space emanates from this sector.”
Jaijit Bhattacharya, Partner, Infrastructure and Government Services, KPMG said: “We welcome the initiative which is the need of the hour for the Indian economy. Cities are the growth enablers and current Indian cities are stagnating in terms of growth in India. It is heartening to note that budgetary provisions have been made for the next generation cities.”