Will economic compulsions allow for a realty-friendly budget?

The state of the Indian economy, suggests that the government will have to walk a tight rope with the Union Budget 2017-18, amidst forecasts of a slowing economy. Although banks are now flush with R The state of the Indian economy, suggests that the government will have to walk a tight rope with the Union Budget 2017-18, amidst forecasts of a slowing economy. Although banks are now flush with funds, due to the government’s demonetisation drive and limit on the extent of cash withdrawal, the overall effect of the measure has not gone down well, with the health of the economy. The Indian Central Statistics Office, has estimated that economic growth will slow to 7.1% in the current fiscal year ending March 31, 2017. This is slower than the government’s prior estimates and the 7.6% growth, last year. The estimates have been reduced in all the sectors, except agriculture, which has improved due to the positive monsoon season. Analysts, however, warn that these forecasts are toned down, since the real impact will be seen in the upcoming fiscal year.

Moreover, the impact on agriculture will also be visible, as the demonetisation immediately prior to the crop season will take its toll. Similarities with global markets, brings hope to Indian realty The real estate fraternity, nevertheless, remains upbeat and believes that the state of the economy, definitely allows the government to provide relief to the real estate sector and home buyers. They cite the Morgan Stanley report dated December 6, 2016, which suggests that annual Indian property sales is expected to grow, from USD 105 billion in 2015 to USD 462 billion in 2025. Research estimates a 14% compound annual growth rate (CAGR) for property sector demand during 2015-20 (8% volume, 6% pricing) and an 18% CAGR in the five years after that, versus the 12% CAGR (5% volume, 7% price) over the past six years. India in 2015, is also similar to China in 2000-03 on key macro parameters. In the past 15 years, China’s economy and per capita income have quadrupled, urbanisation has doubled and the property segment has grown 10x, to USD 1.3 trillion in annual sales

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