Union Budget 2017 to push affordable housing sector: Naidu

The Dollar Business Bureau

Underlining the Union Budget 2017 as “peoplisitc” and not "populist", Urban Development Minister Venkaiah Naidu on Thursday said the government has made all-out attempts to strengthen the country’s infrastructure sector, through granting infrastructure status and giving concessions to affordable housing sector, and feels that these developments will give a considerable push to the affordable housing sector. 

"The Union finance minister has kept before the country a progressive and lokpriya (popular) budget. But, it is not populist, rather peoplistic -- people-oriented, not election-oriented. The Union Budget amply reflected the Centre's inclusive development plan and gives "significant" push to affordable housing,” Naidu said.  

“Budget for 2017-18 has made house buyers king by incentivising developers and catalysing investment flow by announcing several concessions and incentives. The incentives aim at fulfilling the aspirations of the poor, the lower middle class and middle class in urban areas of the country to own a house," the Union minister added.  

Naidu also indicated that Finance Minister Arun Jaitley’s infrastructure push in his budget speech will channalise loan availability at low interest rates and enable long-term funding for developers, who will further the loan benefits to buyers. Furthermore, giving infrastructure status to the sector also entitles developers to tax and other fiscal stimulations, thereby making the sector more "attractive". 

"It will benefit the housing sector since financial institutions lending to developers now look at the sector favourably," he said.  

On Wednesday, Jaitely also announced the abolition of the Foreign Investment Promotion Board (FIPB), which is expected to ease investments in the housing industry and also to increase FDI flows in the sector.    

“Large public sector investors like Employee Provident Fund Organisation and Insurance Firms will now invest in housing as they are mandated to invest specified portion of their funds in infrastructure projects,” Naidu said. 

Naidu also pointed out to the Rs.1,500 crore or 18.30% hike in Pradhan Mantri Awas Yojana (Urban) allocation, terming it a "major" increase in the housing sector.