Affordable Housing, Interest Rates And Taxes: What's On Niranjan Hiranandani's Budget Expectations List?

As the nation eagerly awaits the Union Budget 2025, real estate mogul Dr. Niranjan Hiranandani has outlined his expectations from Finance Minister Nirmala Sitharaman. In an exclusive interview with Republic Media Network, Hiranandani stressed the need for a stronger push toward affordable housing, the reduction of home loan interest rates, and urgent tax reforms to drive formal economic activity.

Focus is on affordable housing

The foremost demand from Hiranandani is a heightened focus on affordable housing. While the government’s ongoing efforts under the Pradhan Mantri Awas Yojana (PMAY) have made strides, Hiranandani believes the scale needs to be significantly increased. “The cap of Rs 45 lakh in affordable homes is just not enough. We need to raise this to at least Rs 1 crore,” he stressed.

Hiranandani further pointed out that while land acquisition and approvals are largely state matters, the central government can play an important role in creating a supportive framework for affordable housing.

Challenge of high interest rates

Another key expectation from the Budget is a reduction in the interest rates on home loans. Hiranandani called for a revision of the home loan interest deduction limit, which has remained stagnant at Rs 2 lakh for over a decade. “The deduction should be raised to at least Rs 5 lakh to make home loans more accessible,” he argued.

While he acknowledged that the Reserve Bank of India ( RBI ) directly controls interest rates, he stressed that the Finance Minister could influence rates through schemes like PMAY. A reduction in home loan interest rates would make housing more affordable for middle-class families and boost the real estate market.

Overdue tax reforms

In addition to housing and interest rates, Hiranandani highlighted the urgent need for individual income tax reforms. He pointed out that the current tax rates, which can go as high as 37%, are discouraging compliance and pushing people towards cash hoarding, a trend that has only increased since the demonetization phase.

“Last year’s changes to the capital gains tax were a step in the right direction. However, individual income tax rates need an overhaul. We have seen cash circulation rise from Rs 16 lakh crore during demonetisation to Rs 30 lakh crore today. High tax rates contribute to this issue and need to be restructured to reduce cash dependency and encourage formal economic activity,” he said.

Streamlining PMAY and redeveloping slums

Hiranandani believes that despite challenges such as land acquisition and approvals, the success of PMAY is already evident. With the financial structure in place, he anticipates a streamlined delivery of affordable housing in urban areas. He also sees slum redevelopment, particularly in Mumbai, as a major area of focus for the government in the coming years.

“The redevelopment of slums in Mumbai, inspired by the Dharavi model, could be a significant breakthrough. The government, both at the state and central levels, is committed to this initiative. We could see all slums in Mumbai redeveloped within the next five to seven years, transforming the city,” he said.

Smart cities and India’s global ambitions

With the government’s push towards smart cities, Hiranandani sees great potential for the future of urban development. He believes that the key to success lies in collaboration between the central government, state governments, and local corporations.

The example of the Atal Bridge, which was completed in just five years with an investment of Rs 22,000 crores shows the potential of such collaborations. Hiranandani also highlighted the progress of Mumbai’s metro project, which is on track to complete 300 km of metro lines in the next two years.

“India’s transformation is evident. With proper execution and collaboration, we can achieve remarkable milestones. India is poised to become a global success story, and the world is taking notice,” Hiranandani added.