The announcements made by Finance Minister Nirmala Sitharaman will help spur further growth in the real estate sector given that we are already in a low interest and easy liquidity regime. By Krish Raveshia. The Union budget 2021-22 is in many ways the most reformist-minded budget presented by Prime Minister Narendra Modi-led NDA government. It has something for every sector. A host of proposals were announced for the real estate, infrastructure and urban development segments. While the reform measures are expected to be expanded, the announcements made by Finance Minister Nirmala Sitharaman will help spur further growth in the real estate sector given that we are already in a low interest and easy liquidity regime. The move to allocate Rs 545.81 billion for housing and urban development will help in further reviving the sector. The decision to extend tax benefits on interest paid on loans for affordable housing will incentivise investment in homes. The extension of tax holiday by one more year for developers of affordable rental housing projects will ensure a steady supply in this segment. This will especially facilitate in addressing the issue of shortage of housing for migrant laborers who travel from one location to the other for work. The announcement to create a portal to collect information on unskilled migrant workers is a step in the right direction for a country where such a workforce is largely in the unorganised sector. The move will help boost confidence and provide a sense of job security to migrant workers who left for their hometowns in droves following the announcement of the world’s largest Covid-19-related lockdown in 2020. In a bold move, the Finance Ministry allowed tax exemption for real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) in a bid to bolster public participation to provide easy funding for the real estate and infrastructure sectors. Permitting foreign portfolio investors to finance the debt of REITs and InvITs will make investments in these instruments more lucrative. Also, the creation of the new Development Finance Institution (DFI) by the government promises to usher in a new era in infrastructure financing in the country. The initial capital of Rs 20,000 crores with an outlay of Rs 5 trillion in three years will ensure financing for large-scale infrastructure projects. The timely availability of funds for infrastructure projects is critical for the overall growth of the economy. The government is spending approximately Rs 1.03 trillion on the expansion of national highways and development all around the country. The government has also proposed to allocate Rs 641.8 billion over the next six years to improve the health infrastructure of the country under the Atmanirbhar Swachh Bharat Yojana. The massive push to infrastructure will help improve connectivity, create new smart cities and lead to price appreciation in several pockets. As the nation’s second-largest job creator after agriculture, the real estate sector has always attracted the government’s attention. It has the potential to contribute a 13 per cent share towards India’s GDP by 2025. The announcements made in the Union budget for the real estate sector have, therefore, laid the foundation for its long-term growth. Krish Raveshia is CEO, Azlo Realty