Pre-Budget 2025: StockGro Expert Palak Jain decodes growth trajectory of the infrastructure and real estate industry
- StockGro expert Palak Jain discusses how infrastructure and real estate in India will be affected by the Union Budget 2025.
India is considered to be in its golden era due to its staggering growth despite global pressure. One of the main catalysts of this growth is the infrastructure sector. It has significantly improved the connectivity and availability of resources in the past few years.
India is a consumption-driven economy, and the real estate market is its classic example. Its growth and potential in India are unprecedented. These days, the infrastructure and real estate sectors are in the limelight due to the upcoming Union Budget 2025 as their allocation indicates significant details about the economic growth.
This blog explores the views of StockGro market expert Palak Jain regarding the growing demand and government investments in the infrastructure and real estate sector. She also emphasises the potential investment opportunity in the industry for investors to tap the growth.
Budget allocations and performance of infrastructure in India
Infrastructure is a broad term covering transportation networks, offices, physical structures, etc. Usually, it grabs crucial attention in the budget announcement. Allocation to infrastructure indicates a government’s long-term and robust ideas for improving an economy.
In the Budget 2024, this allocation was 3.4% of the Gross Domestic Product (GDP), 0.9% points higher than the Budget 2023 allocation. This allocation is executed by robust projects like the Gatishakti Master Plan and National Logistics Policy.
The infrastructure sector recorded moderate growth, which slowed down during the year. Compared to 12.7% in October 2023, the growth fell sharply to 3.1%. However, the sector is expected to consolidate in the Q4 of FY 2024-25.
Performance of the real estate sector in India in 2024
Infrastructure is directly linked to real estate in India. It is one of the fastest-growing sectors in the country. The growing per capita income, urbanisation, government motivation, potential economic growth, etc., are catalysing the growth of real estate in India. As of September 2024, the luxury real estate sector has registered 37.8% year-on-year growth. Moreover, it attracted record equity investments of US$ 11.4 billion in 2024.
Expectations from the Union Budget 2025
Palak Jain anticipates that “India's infrastructure and real estate sectors are set for strong growth, driven by government investments like the National Infrastructure Pipeline and the booming demand from urbanization”. In light of this growth, the infrastructure or capital expenditure allocation is expected to rise in
As the Budget 2025 approaches, the impact of the budget on real estate sector may be observed in some changes in policies and taxation. The overall investment in infrastructure from companies and the government is expected to reach the mark of US$ 1.4 trillion by 2025. Moreover, as the market expert, Palak Jain, mentions “Key areas like transportation, renewable energy, affordable housing, and commercial real estate are expected to benefit the most”.
Apart from this, a crucial expectation from the Union Budget 2025 is the easing of capital gains taxation. Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) are key indirect investments for these sectors. Modification in its capital gains taxes can attract better investments in the industry.
Future outline for infrastructure and real estate sector in India
According to the current scenario, demand for infrastructure and real estate in India does not seem to fall short in the near term. Palak Jain indicates these sectors to be one of the key drivers for India’s aim to become a US$ 5 trillion economy in 2025.
Indian policies like the National Infrastructure Pipeline and the Ministry of Road Transport and Highways efforts in recent years have been successful in unlocking several in the development journey. However, data indicates that India needs to increase its budget allocation and innovate to tap sustainable growth in the upcoming years.
The real estate sector in India will be potentially growing at a robust pace in the upcoming years. Its market is expected to reach US$ 9.3 billion by 2040. Moreover, data indicates a shortage in urban housing of about 10 million units, highlighting a potential untapped opportunity for the market.
StockGro Predictions: Stocks to watch
Amidst the bright growth prospects for the infrastructure and real estate sector, Palak Jain finds potential investment opportunities in the Godrej Properties stock.
She also presents her view that “ With a long-term approach and a focus on companies with solid fundamentals, investors can tap into the growth potential of these sectors as India moves towards a $5 trillion economy”. For more details on her advisory calls, connect with her on StockGro.
Note to the Reader: This article is part of Mint's paid consumer connect initiative and is independently created by the brand. Mint assumes no editorial responsibility for the content, including its accuracy, completeness, or any errors or omissions. Readers are advised to verify all information independently.
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Business NewsFocusPre-Budget 2025: StockGro Expert Palak Jain decodes growth trajectory of the infrastructure and real estate industry
First Published:23 Jan 2025, 03:15 PM IST
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