Affordable housing to see greater participation from organised developers

The Union Budget 2017 has demonstrated fiscal prudence while placing a strong emphasis on infrastructure building and in addressing the housing needs of rural India and of specific income segments in urban India. We welcome the conferment of infrastructure status to affordable housing, which can improve resource allocation to the sector, thereby reducing cost of capital for developers. Moreover, the changes under Section 80 IB with respect to size of units (built up area to carpet area), timeframes for project completion (3 years to 5 years) and geography (upto 60 sq.m. beyond the 4 metros) will encourage greater participation by organised developers in the affordable housing segment, thereby catalysing development and reducing the supply gap. Interest subsidies announced last year under PMAY and further broadened during the recent address of the Prime Minister will further help reduce cost of home ownership for the relevant segment. Enhancement of budget allocation under PMAY and to NHB will greatly help finance these segments. Overall, the focus accorded to housing and infrastructure will provide impetus to accessibility, connectivity and job creation, which bodes well for the nation’s economy.