Budget 2014 Highlights and Implications

The full report

The 45 day old NDA presented its maiden budget in the Parliament yesterday. Expectations ran high from a Government comprising of a political party having an impressive majority after 30 years; large-scale, path breaking economic policies, reforms and initiatives were anticipated, especially against the backdrop of having seen sub 5 percent GDP growth rates for 2 consecutive years.  Given the huge subsidy bills for welfare schemes run by the Government, uncertainty over tax collections and revenues, etc that threaten to result in high fiscal deficits, we feel that the Finance Minister has done a good job of walking the tight rope through this budget.  With some provisions for everybody, the Prime Minister – Narendra Modi led Government has commenced on its path to deliver its ‘achche din’ promise to the country. The biggest take away from the budget speech has to be the 4.1 percent fiscal deficit target for the financial year and a further guidance of 3.6 percent for FY 2016.

Specifically for the real estate sector, there are:

  • budgetory enhancements for housing (rural & urban),
  • allocation of financial resources for the development of 100 'smart' cities, industrial corridors and infrastructure
  • tax incentives for buyers,
  • promise of introducing REITs with necessary support on taxation,
  • incentives to attract FDI