Maharashtra's 2025 Budget: A Catalyst for Real Estate Growth through Infrastructure and Affordable Housing

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The Maharashtra government's 2025 budget has been unveiled, marking a pivotal moment for the state's economic and infrastructural landscape. With a pronounced emphasis on infrastructure development and affordable housing, the budget is poised to significantly invigorate the real estate sector. The Confederation of Real Estate Developers' Associations of India - Maharashtra Chamber of Housing Industry (CREDAI-MCHI) has lauded these initiatives, highlighting their potential to transform the Mumbai Metropolitan Region (MMR) into a thriving economic hub.

Strategic Investments in Infrastructure

Deputy Chief Minister and Finance Minister Ajit Pawar presented the budget on March 10, 2025, introducing a comprehensive industrial policy aimed at attracting ₹40 lakh crore in investments and generating 50 lakh jobs. A cornerstone of this policy is the development of the MMR as a growth nucleus, with projections estimating a $1.5 trillion economy by 2047. A notable announcement includes the proposal for a third airport near Vadhvan port in Palghar district, a move anticipated to enhance connectivity and stimulate regional development.

CREDAI-MCHI President Domnic Romell emphasised that the budget lays a robust foundation for economic growth through strategic investments in infrastructure and housing. He highlighted the focus on urban development projects such as multi-modal corridors and metro expansions, which are expected to bolster connectivity and position the MMR as India's economic powerhouse.

Commitment to Affordable Housing

The budget allocates ₹8,100 crore for urban housing, reaffirming the government's dedication to the 'Housing for All' initiative. This substantial investment is anticipated to invigorate real estate development, making homeownership more accessible to a broader segment of the population. Dhaval Ajmera, Secretary of CREDAI-MCHI, noted that the emphasis on industrial development, transport infrastructure, and housing will unlock new opportunities for the real estate and allied sectors.

Implications for the Real Estate Sector

The 2025 budget introduces several measures with direct implications for the real estate industry:

- Urban Development Initiatives: The focus on multi-modal corridors and metro projects is expected to enhance urban mobility, reduce congestion, and increase the livability of urban areas. These improvements are likely to make cities more attractive for residential and commercial investments.

- Affordable Housing Investments: The allocation for urban housing underscores the government's commitment to increasing the housing supply, particularly for economically weaker sections. This move is expected to stimulate demand in the housing market and provide impetus to real estate developers focusing on affordable housing projects.

- Infrastructure Development: The proposed capital expenditure of ₹11.11 lakh crore for infrastructure is anticipated to have a multiplier effect on the real estate and construction sectors. Enhanced infrastructure not only improves connectivity but also increases the value of adjacent real estate developments.

Broader Economic Impact

The budget's emphasis on infrastructure and housing is expected to have far-reaching effects on Maharashtra's economy:

- Job Creation: The industrial policy aims to generate 50 lakh jobs, which will increase disposable incomes and potentially boost demand in the housing market.

- Investment Attraction: By creating a conducive environment for investments, particularly in infrastructure and real estate, the budget positions Maharashtra as an attractive destination for both domestic and international investors.

- Urban Transformation: Projects like the third airport near Vadhvan port are set to transform the urban landscape, leading to the development of new residential and commercial hubs.

Industry Perspectives

Real estate experts have expressed optimism regarding the budget's provisions:

- Neeraj Bansal, Partner and Head, India Global, KPMG in India: Highlighted that the continued policy support is expected to attract fresh capital and expansion opportunities in the real estate sector. The budget's balanced, forward-looking approach is seen as a positive step towards a future-ready economy.

- Gautam Shahi, Director, CRISIL Ratings: Noted that the new tax treatment of buy-backs as dividends might diminish their attractiveness, impacting real estate companies seeking input tax credit on the construction and leasing of commercial assets.

Conclusion

Maharashtra's 2025 budget marks a significant milestone in the state's journey towards economic growth and urban development. By prioritising infrastructure and affordable housing, the government not only addresses immediate needs but also lays the groundwork for sustained progress in the real estate sector. As these initiatives unfold, stakeholders across the industry remain optimistic about the transformative impact on the state's economic landscape.