Infrastructure: Budget 2017 providing infra status for affordable housing will reduce costs


Budget announcement: Infra status for Affordable Housing will increase funds flow as well as reduce interest cost. Was expected.

Status upgrade for affordable housing
The real estate sector is hopeful that the infrastructure status for affordable housing will lead to simplification in the approval process for such projects and enhanced transparency. Improved accountability could further attract debt and pension funds in the segment.

133 km/day of rural roads construction indeed laudable. Budget provides for further R27,000 crs to complete PMGSY by 2019. Welcome.

Road to rural development
Pace of rural road construction has shot up from 73 km/day in 2011-14 to 133 km/day. The government has made an allocation of R19,000 crore for the Pradhan Mantri Gram Sadak Yojana. Along with the spending by state governments, this will result in a total capital expenditure of R27,000 crore for rural roads.

Budget pushes for PPP in 2 areas ~ O&M at AAI Airports & a new Metro Rail Act to provide structure for pvt participation.
After huge issues faced by Hyd Metro, the new Metro Rail Act, proposed in the Budget to foster PPP, will really have to be pathbreaking.

Budget boost for public private partnerships
Select airports in Tier II towns are to be taken up for operation and maintenance in the public-private partnership mode. The Airports Authority of India Act will be amended to facilitate effective monetisation of assets while a new Metro Rail Act will enable rationalisation of existing laws.

Finally happening. 4 coal mines to be auctioned next fiscal for private commercial mining with unspecified end-use. Bids will be revealing.

Opening up commercial mining
For the first time in more than four decades, four coal mines are to be auctioned to both private and state-run companies starting April 1. A total of 23 mines are to be sold this year.

FM’s mention in Budget that 7,000 railway stations would be energised with solar power has expanded the solar playing field substantively.

Green signal for solar energy at stations
Work has already begun to power up 300 railway stations with solar energy. The proposal to feed at least 7,000 stations in the medium term will go a long way in reducing dependence on fossil fuels.

Would be useful if Urban Ministry put out a quarterly update on the 100 Smart City progress. Seems to have fallen off the public radar.

US to collaborate in building smart cities
The US is exploring new opportunities for partnering in India’s efforts to create smart cities. The two countries have signed MoUs to develop three smart cities in Allahabad, Ajmer and Vishakhapatnam.


Walls N Roof Comment: Realty sector of India has been boosted post the budget 2017 announced. The infrastructure status to affordable housing will increase fund flow and reduce interest cost. There are various other positive factors that have led to hassle in the market like US collaboration to build smart cities. Allahabad, Ajmer and Vishakhapatnam are few smart cities that have signed MoUs with two other countries. Smart cities mission, affordable housing for all, RERA, GST, cut down in interest rate on home loans, infrastructure status to affordable housing etc. are those factors which will bring tremendous growth of realty sector of India in the year 2017.

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