Union Budget 2020: Good for long-term but misses 'quick fixes'

Clearly, this was a 'make or break' Budget for the government with most sectors (including real estate) seeking concessions to boost consumption and investments.

The government has lived up to the overall expectations in several ways. This Budget restores some of the lost confidence in the India growth story - and more importantly, within India Inc. - by laying emphasis on wealth creators.

That said, the Budget misses on the 'quick fixes' the real estate sector needs urgently and focuses more on a long-term vision. Still, there were a few positives:

Affordable housing continues to be the government's focal point for real estate. The previous tax exemptions for both homebuyers and developers have been extended for another one year.

Personal tax relief across various income slabs will invariably increase disposable income at the hands of the middle class and boost their consumption capabilities. This benefit may, however, not percolate down to the housing sector as significantly as hoped for.

Alternative segments get more boost: Rather than giving direct benefits to residential real estate as a whole, the FM laid more focus on alternative segments within real estate - such as warehousing, data centres, schools, hospitals and hospitality.

Plans to build Data Centre Parks across the country will boost demand for more real estate spaces. Simultaneously, plans to develop 5 archaeological sites will open new avenues for employment and also indirectly push real estate development.

Boost to personal investment: Raising the insurance cover of depositors from INR 1 lakh to INR 5 lakh will boost confidence of depositors. This, in a way, will lead to bigger deposits – and thereby help in increasing liquidity in the banking system.

Abolition of DDT for corporates is another bold move that will help them to diversify or expand their business and also make India an attractive destination for investors, thereby boosting investments. This is definitely good news for commercial real estate.

Infrastructure development remained on top of the government's agenda of propelling economic growth. Undoubtedly, infra development has a major multiplier effect on not just the overall economy but on the real estate market as well.