Budget 2019-20: Key Highlights

Budget 2019-20: Key Highlights

Budget 2019-20: Key Highlights

When you have a Budget which is the first of Modi 2.0 and from India’s second ever woman finance minister, the expectations are bound to be high. The real estate sector, which has still been grappling with a market slowdown, had several expectations as well. Here’s what the sector got from Union Budget 2019-20.


Here are the highlights:  

Vision for India’s economy 

Sitharaman¬†clearly states that it is ‚ÄúIn our capacity to reach¬†USD 5 trillion‚Ä̬†from the current almost USD 3 trillion. In 2014-13, this number stood at USD 1.8 trillion. Going ahead, the vision would be to provide and upgrade social and physical infrastructure,¬†give a¬†phenomenal boost to digital India, mitigate¬†pollution¬†issues; focus on¬†Make¬†In¬†India, space programmes, blue economy, exports and health.¬†¬†

Connectivity for Indians 

This found the top spot in terms of priority. Various infrastructure projects such as the ongoing Pradhan Mantri Gram Sadak Yojana, industrial corridors, dedicated freight corridors, Bhartamala and Sagarmala projects, Jal Marg Vikas and UDAN Schemes have improved and will continue to improve the overall dynamics of accessibility. Notable among these is the UDAN Scheme that is in the process of connecting big and small cities. During 2018-19, 210 km of metro lines were operationalised, improving  connectivity and thereby, opening up more developable spaces around these areas. Altogether, 657 kms of metro rail has started functioning.  Going ahead, the National Common Mobility Card (NCMC) will help all to pay for several transport charges- metro, bus, parking or toll, irrespective of the place you are in.  

Announcements for the housing sector  

The announcement of various measures such as rebates for affordable housing buyers, framing of rental housing policy, return of charge of housing finance companies to the Reserve Bank of India (RBI) from the National Housing Bank (NHB),  alignment of definition of affordable housing with GST Acts - have been encouraging for the sector as a whole.  

New housing finance regulator: With the RBI taking over the housing finance regulation, non-banking finance companies (NBFCs) that were till today loosely regulated, will come directly under the central bank. This will help the housing sector and others to contain practices associated with risks of shadow banking. Supervision of NBFCs and Housing Finance Companies (HFCs) will become much easier here on.  

Boost to affordable housing: Buyers of affordable homes too get to save Rs 7 lakhs, up from Rs 3.5 lakh on a 15-year long loan repayment period, thanks to the proposal that will allow such buyers an additional deduction of up to Rs 1.5 lakhs for interest paid on loans borrowed up to March 31, 2020 for the purchase of an affordable house valued up to Rs 45 lakhs.  

Rental housing:¬†As of now, 81 lakh homes have been sanctioned under PMAY-U but industry experts have always believed that rental housing could help the government inch towards ‚ÄėHousing¬†For¬†All‚Äô, further and faster. Budget 2019 has enabled this. Stating that our existing rental laws have been ‚Äėarchaic‚Äô, modern tenant laws will be introduced. ‚ÄúA Model¬†Tenancy Law will also be finalised and¬†circulated to the states,‚Ä̬†Sitharaman¬†asserted.¬†¬†

Capital gains for start-ups:¬†‚ÄúI also propose to extend the period of exemption of capital gains arising from sale of residential house for investment in start-ups up to 31.3.2021 and relax certain conditions of this exemption,‚Ä̬†announced¬†Sitharaman. This move will benefit homeowners looking to finance their¬†entreprenurial¬†dreams.¬†¬†

PMAY-Grameen: Between 2019-22, 1.95 crore units would be made available for PMAY beneficiaries in the rural areas. The good news here is that as against 314 days taken to complete a unit in 2015-16, by 2018-19 with improved efficiency and technology, time taken to build the same unit has reduced drastically and is 114 days.  

Environment consciousness 

Given that air pollution has been an issue plaguing most Indian cities, those trying to mitigate the negative environmental impact by buying e-vehicles will benefit. Under Phase II of FAME Scheme that was effective from April 2019, Rs 10,000 crore has already been allotted for a period of three years to encourage e-vehicle adoption. While GST on e-vehicles has already been brought down to 5 per cent, the government will now on provide an additional income tax deduction of Rs 1.5 lakh on interest paid on loans to buy such vehicles. This translates into a benefit of Rs 2.5 lakh over the loan period.   

Big boost to infrastructure 

Infrastructure has found its way into the vision document and needless to say the various infra projects have been allocated funds to realise the vision faster. These include rail, road projects, blueprint for water grids, i-ways, airports etc. Over the next five years, Rs 100 lakh crore will be pumped in to develop infrastructure.  

Start-ups to look up 

Furthering the cause of Make-In-India and job and employment avenues in the country, the central government is looking at incentivising the startups. These will not be scrutinised in terms of valuations of share premiums. For this, e-verifications will be put in place to check identity and authenticity. The Central Board of Direct Taxes (CBDT) will also take up issues related to pending assessments. Start-ups will not be required to justify fair market value of their shares issued to certain investors either.  


Last Updated: Fri Jul 05 2019

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