The outlay for affordable housing under PM Awas Yojana (PMAY), which has been enhanced by 66% to Rs 79,000 crore, was welcomed by the real estate industry.

With the finance minister making an attempt to invigorate the critical demand drivers of consumption and investment, India Inc exuded optimism that private capex, will start picking up from now on.

The industry, basically feels that measures related to digital infrastructure, emphasis on urbanisation, and green growth, addresses the growth concerns. Further, the 33% rise in capital spending by the government for FY24 will push overall productivity of the economy and lead to creation of jobs.

According to Sajjan Jindal, chairman of JSW Group, a 40% increase in the income tax rebate limit from Rs 5 lakh to Rs 7 lakh will put more money in the pockets of middle income group, which will lead to more spending.

“The move to rationalise personal income tax rates will go a long way in increasing disposable incomes, thus giving consumption a leg-up which will in turn have a salutary impact on India Inc’s investments,” Sanjiv Bajaj, president, CII said.

Continued support to the vehicle scrappage plan, extension of customs duty on lithium-ion batteries by another year, and 50 additional sites for improving regional air connectivity are some of the other measures announced in the Budget, which are seen to give a push to investments.

“The emphasis on increased infrastructure spending and support for lithium-ion battery manufacturing will be a great multiplier for industry overall,” Sudarshan Venu, MD, TVS Motor Company, said.

While there was no direct benefit announced for the automotive sector, the reduction in individual tax slabs is expected to benefit the budget segment vehicles.

Manish Raj Singhania, president, Federation of Automobile Dealers Association said, “The reduction in individual tax slabs will benefit the ailing entry level two-wheeler and passenger vehicle segment.”

According to Rajiv Sabharwal, managing director & CEO, Tata Capital, “Strong agricultural credit outlay, support measures, ease of doing business, and digitisation drive across various sectors will improve multiple clusters within the economy”.

Shashi Kiran Shetty, founder and chairman, Allcargo Group said, “Logistics sector is more than happy to see a slew of announcements in all segments of infrastructure, which will help cut down the logistics costs”.

Besides increased infrastructure spending, other demand boosting measures announced by the government include allocation of funds to scrap old vehicles of the Central government as well as providing support to states in replacing old vehicles and ambulances. Dheeraj Hinduja, executive chairman, Ashok Leyland said, “The announcement that old vehicles owned by the central government and state governments will be replaced as part of the vehicle scrapping policy presents a significant opportunity for fleet modernisation”.

Boosting spending in the rural sector is expected to lead to higher demand for discretionary items like two-wheelers which has started to show some struggle once again in recent months forcing companies to offer discounts. Sales of two-wheelers have already hit a 10-year low. Rajeev Singh, partner, Deloitte India said, “Focus on agriculture and rural India are all steps in reviving the rural economy which impact two-wheeler and entry level cars.”

The outlay for affordable housing under PM Awas Yojana (PMAY), which has been enhanced by 66% to `79,000 crore, was welcomed by the real estate industry. The unanimous verdict of the industry players was that this will provide the much-needed boost for the affordable housing segment which saw a decline last year. Sudhir Pai, CEO Magicbricks called the hike in PMAY outlay a bonanza for affordable housing. While there was no direct announcements for the real estate sector, higher income in the hands of the middle class is expected to drive up demand in the residential housing sector.

Courtesy: FE