by 99Realty 
The real estate sector in India stands as a cornerstone of the nation’s economy, contributing approximately 8-9% of the GDP. It holds the distinction of being the second-largest source of employment after agriculture. Encompassing over 200 ancillary industries—including cement, steel, bricks, paints, and furnishings—the real estate industry has a vast and dynamic impact. By 2030, it is projected to grow into a $1 trillion industry, contributing 13-15% of the GDP, underscoring its indispensable role in shaping India’s economic trajectory.
Infrastructure Development: A Growth Engine
India’s ambitious infrastructure plans, epitomized by projects such as Bharatmala and Sagarmala, are reshaping the nation’s landscape. With a $1.4 trillion investment pipeline, the country is developing cutting-edge infrastructure, including:
- Highways and Transport Corridors: Constructing 35-40 km of highways daily, revolutionizing connectivity.
- Greenfield Airports: Enhancing international and domestic travel infrastructure.
- Smart Cities: Building futuristic cities equipped with sustainable technologies.
- Industrial Parks: Promoting manufacturing and exports.
- Coastal Economic Zones (CEZs): Bolstering trade and maritime commerce.
- Renewable Energy Facilities: Driving sustainable development.
These initiatives create significant demand for housing, commercial offices, warehouses, and cold storage facilities, thereby driving real estate expansion.
RERA: Enhancing Transparency and Trust
The Real Estate (Regulation and Development) Act, 2016 (RERA), has been a game-changer for the industry, fostering accountability and safeguarding buyer interests. Key reforms introduced by RERA include:
Mandatory Project Transparency: Developers must disclose critical project details, such as timelines and budgets.
Escrow Accounts: Ensuring funds are used exclusively for designated projects.
Timely Project Delivery: Imposing penalties for delays.
These measures have enhanced investor confidence, resulting in a more structured and trustworthy market.
Also Read: RERA Checklist for New Home Buyers
Simplified Taxation: GST’s Impact on Real Estate
The introduction of the Goods and Services Tax (GST) on July 1, 2017, revolutionized the tax structure in real estate by replacing complex, multi-layered taxation systems. Key features include:
Uniform Tax Rates: 5% for residential properties and 18% for commercial properties.
Input Tax Credit: Allowing developers to offset taxes paid on inputs, reducing costs and increasing affordability.
GST has streamlined transactions, boosted transparency, and facilitated easier compliance for stakeholders.
Housing for All: Bridging the Gap
The government’s Housing for All initiative is addressing India’s acute housing shortage. Despite falling short of its initial target of delivering 1.23 crore urban homes by 2022, the policy has achieved significant progress, with 76.5 lakh homes completed. This initiative has spurred demand for affordable housing while promoting:
- Urbanization: Supporting population growth in cities.
- Sustainability: Incorporating eco-friendly housing solutions.
- Equitable Growth: Providing housing access to marginalized communities.
Also Read: Understanding the Impact of the Reintroduced Interest Subsidy Under PMAY in Budget 2024
Regulating Fractional Ownership: Democratizing Investments
Fractional Property Ownership (FPO) is revolutionizing the real estate investment landscape. By allowing smaller investments (₹20-30 lakh), FPO enables individuals to access high-yield assets such as Grade-A Office Spaces, Retail Spaces, Industrial Parks and Warehouses.
The Securities and Exchange Board of India (SEBI) is actively regulating the sector to enforce transparency and discipline. This regulatory framework is expected to attract more investors, further fueling growth.
Also Read: The Ultimate Guide to Real Estate Investment Trusts (REITs)
Recommendations for Future Growth
The Indian real estate sector is a linchpin in the country’s economic progress, with the potential to transform the urban landscape. As policies evolve and infrastructure expands, the sector is poised for unprecedented growth, offering a robust foundation for India’s journey towards becoming a $5 trillion economy. By prioritizing transparency, sustainability, and innovation, we can unlock the full potential of real estate as a catalyst for national prosperity.
Policy Reforms and Execution: Strengthening the implementation of housing policies, Introducing incentives for green building initiatives and Enhancing public-private partnerships in infrastructure projects can significantly contribute to the rapid expansion of real estate in India.
Focus on Sustainability: Sustainability matter the most and promoting eco-friendly construction practices, adopting renewable energy in real estate developments and encouraging vertical urbanization to optimize land use can significantly reduce Indian real estate industry’s overall carbon footprint.
Leveraging Technology: Implementing advanced construction technologies like MIVAN, using AI and data analytics for market insights can help enhancing customer experience and drive transparency.
India’s real estate sector is poised for transformative growth, driven by robust infrastructure development, regulatory reforms, and government initiatives. With its potential to contribute significantly to GDP and generate employment, the sector remains a pillar of the nation’s economic aspirations. Policies fostering transparency, affordability, and inclusivity will be key to unlocking its full potential.
