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How governments new Infra policies benefited the Real-estate sector after Budget 2019.

13 Jan 2020

Since India’s infrastructure is playing an essential role in it becoming a $5-trillion economy, finance minister “Nirmala Sithraman” begin and increased her largesse to it while presenting Union Budget-2019-20 on July 5, which had fiscal prudence written all over it. For that purpose the government has planned to spend a total of Rs100 crores in the coming next five years. While classifying the infrastructure financing needs would be around Rs 20 lakh crores a year, the FM also considered to intensify or improve quality of the sources of capital for the sector as India chases its dream to become a developed nation. 

In accordance, the FM said a speech of 127-minute, it was about lifeline of economy and set down in her budget the large sums to provide a more powerful connectivity through road, air and water in the times to come. It is also stated by her that huge push was given by government to all forms of physical connectivity through the Pradhan Mantri Gram Sadak Yojana, industrial corridors, dedicated freight corridors, Bhartamala and Sagarmala projects, Jal Marg Vikas and UDAN (Uden Deskh Ke Aam Nagrik) Schemes. 

The Bharatmala project will help to develop the national road corridors and highways while the Sagarmala project aims to improve quality of port connectivity. In addition to Jal Marg Vikas project for enhancement of navigation on national waterways is targeted at smoothening internal trade that is carried through inland water transport. To develop air connectivity in the smaller cities, the UDAN scheme is meant for it.

For example to improve railway infrastructure, approximate Rs 50 lakh crore would be invested. Likewise, to arrange better road connectivity in rural parts of the country. Rs 80,250 crore has to be spent.

How does the infra push help the realty sector? 

One of the main criteria is connectivity on which a property's attractiveness is evaluated. For example, many locations have a very huge inventory stock in major Indian cities because connectivity in these areas is not still poor. As major cities are overflowed with an increasing population, to accommodate the rising population the government has been trying to create new urban centres. This similar is true of industries, too. Previous examples show that brilliant business models and most completely planned residential alternatives failed when the locations where they are set up, were caught in connectivity hurdles. If the suburbs were planned to reduce the population burden of big cities, they have not been able to achieve that target exactly for reasons to do with connectivity. 

Developers expected that several other announcements in this year’s budget and were left disappointed on several counts, they have also praised this move, and said better infrastructure would be beneficial for the sector. “A highlight of this budget has been the allocation for the upgrade of infrastructure and the effect on such projects’ faster completion. Any infrastructural development improves the movement of real estate and encourages investments,” says 3BRICK.com team (3BRICK is real-estate website and android app, where end user can search for property and submit their own offer price against the builders quote).