Union Budget 2018: Government to create fund for affordable housing

Updated: Feb 02, 2018, 15:17 IST | A Correspondent

Taking ahead one of the key promises made by the BJP-led central government, the union Budget for 2018-19 focuses on affordable housing

Arun Jaitley said that about 31 lakh homes are to be built in urban areas in 2018-19. In rural areas the target is to construct 51 lakh affordable units. Representation pic
Arun Jaitley said that about 31 lakh homes are to be built in urban areas in 2018-19. In rural areas the target is to construct 51 lakh affordable units. Representation pic

Taking ahead one of the key promises made by the BJP-led central government, the union Budget for 2018-19 focuses on affordable housing. Finance Minister Arun Jaitley has given priority to affordable housing by announcing housing for all by 2022. The government has decided to set up a National Housing Bank (NHB) to create a fund for affordable housing.

Jaitley said that about 31 lakh homes are to be built in urban areas in 2018-19. In rural areas the government has set a target of constructing 51 lakh affordable units. In his speech he assured that, "Persons belonging to poor-and middle-class category are also being provided a great relief in interest rates on housing schemes."

Another big relief for this sector is tax relief of in a 5 per cent range on deals where real estate transactions are undertaken below stamp duty value. Insiders in the real estate industry have mixed reactions to the union Budget's prime focus on affordable housing. Some feel that emphasis on rural areas will help the field and aid the country's growth. Many feel that upgradation of infrastructure like expansion and development of railways and roads will also benefit real estate.

Industry insiders say
Chairman and Managing Director of Sunteck Realty Limited, Kamal Khetan said, "The Budget has focused on initiatives to drive the economic growth and social welfare. It clearly emphasises the government's interest towards the development of rural India and bringing infrastructural development in the country. The allocation of Rs 14.34 lakh crore towards rural housing, rural roads and rural infrastructure will help create employment opportunities."

He added, "Affordable housing is a key growth driver for the real estate industry, as it now enjoys higher affordability given the government support through interest subsidies. The move of setting up a dedicated fund for affordable housing under the National Housing Bank is welcomed."

Surendra Hiranandani, CMD of House of Hiranandani said, "While there was no direct benefit to the real estate sector from the Budget, some measures announced will positively impact it. The announcement of a dedicated affordable housing fund in the National Housing Bank (NHB), funded from priority sector lending shortfall and fully serviced bonds authorised by the Indian government, is a welcome move and could act as a catalyst in the government's vision of 'Housing for All by 2022'." He added, "The move to allow a variation of 5% between transaction value and circle rates for computation of capital gains will not impact transactions significantly in any of the metropolitan cities in India."

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Highlights of the Union Budget 2018

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