Real Estate Sector Expectation: After agriculture, the real estate industry creates the second-most jobs in India. Under the PM Awaas Yojana (PMAY), the Modi administration has built nearly 4 crore dwellings for the impoverished during the past ten years. The sector has different expectations for Modi 3.0 as NDA leader Narendra Modi prepares to take the oath of office as prime minister of the nation for the third time.
Boost to Affordable Housing Industry
A boost to India’s affordable housing industry was announced in Finance Minister Nirmala Sitharaman‘s interim budget, which included the addition of 2 crore more dwellings to the PMAY-U flagship project. By 2040, experts predict the value of the Indian real estate sector to reach Rs 65,000 crore. Industry executives believe that for their sector to grow, the government must continue to provide support.
“To boost economic performance indicators, the real estate industry demands a reorientation of policies and schemes. The PMAY scheme needs to be continually pushed to achieve all housing goals efficiently and time-bound. Reducing the cost of approvals, development premiums, stamp duty, and ready-reckoner rates, in addition to rationalizing tax and GST, will accentuate its growth,” said Niranjan Hiranandani, Chairman, NAREDCO (National Real Estate Development Council). Hiranandadded, “Land and approval financing methodologies must be outlined to facilitate growth and aid in timely completion.”
Diverse Growth in Real Estate Sectors
India’s retail, hospitality, and commercial real estate industries are growing rapidly as well, providing the necessary infrastructure to fulfill the nation’s burgeoning demands. Experts recommend tax simplification and policy adjustments to improve efficiency and spur economic growth. Home sales in India’s residential real estate sector reached a record high of Rs. 3.47 lakh crore (US$ 42 billion) in FY23, a 48 percent year-over-year rise. Strong growth was also seen in the sales volume, which increased by 36% to 379,095 units sold. Leaders in the industry contend that government support is necessary to accelerate the sector’s growth. One of the key demands made by the sector is for changes to the GST.
Tax Rationalization for Construction Materials
“The government must consider tax rationalization for construction raw materials, as this will significantly impact the industry. To boost the housing segment further, we believe the affordable housing definition needs to be revisited. Given the substantial changes in construction costs, including raw materials, labour, and overall development, it is necessary to reassess the price, size, and income criteria to ensure the program remains inclusive and effective,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE.
The Finance Ministry committed to funding the PM Awas Yojana with Rs. 79,000 crore (USD 9.64 billion) in the Union Budget 2023–24, a 66% increase over the previous year. All types of investors will be able to participate in the Indian real estate market thanks to the Real Estate Investment Trust (REIT) platform, which was recently approved by the Securities and Exchange Board of India (SEBI). In the upcoming years, it will generate an opportunity in the Indian market valued at Rs. 1.25 trillion (USD 19.65 billion).