Real Estate and Infrastructure Development has significant implications for the future development of the country and the coming generations will exert tremendous pressure on real estate sector in terms of new, modern and smart lifestyle. Realty sector has seen extraordinary growth in India in the last few decades.
However, with the economies facing recession, the real estate sector has also been experiencing stagnation. But with the NDA government at the centre, the hopes have risen considerably, owing to Modi’s pro-development and infrastructure policies.
2015 has been turnaround year for the Real Estate Industry in India. The “Revolutionary Budget” with number of reforms in the Real Estate sector has been already promised by Modi’s government. The government’s promise to reach the target of affordable homes for all by 2022, is a grand step towards development but for now it seems a bit unrealistic.
The project itself is a huge undertaking which needs sustained government interest and investment.
With many reforms, introduction of 'Benami Transaction Bill' will control the flow of Black Money in the property Market. Now, it will be illicit for the developers to accept an amount of more than Rs 20,000 in cash for any property deals.
Though we agree that this would be a revolutionary step to remove corruption from truck loaded corrupted realty market. But the result of it is yet to be seen to finally call it as a radical reform.
After Modi’s entry in Indian Government, Indian Real Estate Market is moving steadily towards becoming organised sector from a stagnant unorganised sector which is needlessly a positive sign in itself. Real Estate Investment Trusts (REITs) and commercial real estate will make noteworthy impact if taken forward properly as per the plan and agenda. The trust will help retail investors to invest their money in realty ventures by secure possibility for returns.
The other real estate booster in this dehydrated sector is the Ordinance on the Land Acquisition Act, which has relaxed many stern norms over the period of time where a piece of unutilised acquired land must be returned to its original owner. The Government has also introduced MNREGA that will directly impact the availability and cost of labor for construction. This reform will help the developers to find skilled manpower. With the Government’s focus on the creation of 100 Smart Cities and infrastructure development across India, the real estate industry has much to look forward ahead.
India is taking a major leap in the race of development at a global level, the building of Smart Cities is definitely a rational decision taken by the Indian government towards its execution.
The buyers have always felt overburdened with the multiple taxes on property making it a tough task to buy land. A necessary step is required to provide relief to buyers by giving tax incentives which would further help in boosting demand of homes. It will also provide relief to the real estate sector, which is facing a huge slowdown in demand from last few years that had led to liquidity crisis and delay in completion of existing projects.
India has huge potential to attract Foreign Investment and with the plunge of FDI inflow into real estate it has emerged as one of the most promising markets. Therefore, there is an urgent call for suitable amendments in the Foreign Direct Investment (FDI) guidelines in the sector. The reforms prescribed in the proposed real estate bill if acceptable by the global investors could shoot up the inflow of foreign funds in real estate sector by about 15-20 times.
With Foreign Investment, the government should also provide more transparency in the sector, which will boost demand for houses as well as investments in the sector. The idea of single-window clearance system for the real estate industry will help to avoid multiplicity of permissions required for every project and will save time.
In current scenario, the entire focus shall shift towards timely delivery of housing units, which after all is the result everyone hopes and expects in the next seven years. If given proper environment, the real estate sector can emerge as the driving force of the Indian economy. We are expecting a lot of positive changes with the reforms made by government and expect them to be a game changer in unorganised realty market.