India’s real estate market makes up about 8–9% of the country’s GDP, followed by agriculture.
Almost two hundred other businesses depend on India’s real estate. These include the cement, steel, brick, paint, furniture, and many other sectors.
India’s real estate is projected to be worth more than USD 1 trillion by 2030, about 13–15% of the country’s GDP. These results show how important this factor is to the business.
Since the Indian real estate sector is highly important to the economy, it is understandable that the industry relies heavily on laws and regulatory frameworks to thrive.
A concentrated policy shift focused on transparency and demand generation can benefit the sector. Policy gaps, on the other hand, can significantly impede growth.
Grand Infrastructure Vision, Fueling India’s Real Estate:
India has embarked on a very big project to improve all of its infrastructure facilities fueling further growth for India’s real estate.
Over USD 1.4 trillion has been spent on building a huge network of world-class facilities, including greenfield airports, railway routes, smart cities, industrial parks, renewable energy facilities, high-speed transit lines, suburban networks, and a lot more.
A daily average of 35 to 40 kilometers of roads are being constructed under the Bharatmala project. Sagarmala is diligently constructing new ports, repairing existing ones, and establishing Coastal Economic Zones (CEZ).
The extensive efforts made by India to construct new infrastructure inherently intensify the demand for new residential, commercial, retail, cold storage, and other establishments.
RERA:
Regulatory bodies in India took a bold move in 2016 by implementing RERA. It has been crucial in ensuring that the interests of homebuyers are protected and that India’s real estate market is balanced.
To prevent the illicit transfer of funds, developers are required to adhere to strict project delivery timelines, share transparent information, and utilize an escrow account(a specific form of account that is used to store money or assets until specific conditions are met), as mandated by RERA.
Through Rera, India’s real estate market has seen a substantial transformation, and a higher level of transparency has been implemented, which has increased the confidence of both buyers and investors.
Streamlined Tax System with Goods and Services Tax for India’s Real Estate:
The Goods and Services Tax (GST), which took the place of several earlier taxes (such as the value-added tax, service tax, and others), in India’s real estate market on July 1, 2017, considerably streamlined the system as a whole.
Residential property is subject to a tax rate of 5% under GST, whereas commercial property is taxed at 18%.
Provision of Housing for All in India’s Real Estate:
The government has shown that it is serious about giving every family in India a place to live. There are not enough homes for everyone in the country, and policies like “Housing for All” will be very important in closing the gap.
This will also make more people want to live in India at affordable prices. The policy said that 1.23 crore homes had to be built in cities by 2022.
In contrast, 76.5 lakhs were delivered. The numbers are still commendable and represent a constructive step toward achieving the appropriate balance between spurred urbanization, sustainability, and equitable development, even though the ambitious plan has not yet achieved the initially intended target.
SEBI’s determination to control the fractional space:
By lowering the overall barrier to entry, fractional property ownership (FPO) can greatly increase the number of people who can participate in commercial real estate transactions.
A person with limited investments (in the range of 20 to 30 lakhs) can make investments in high-yielding commercial assets such as Grade-A office buildings, industrial parks, warehouses, and other similar properties through the Foreign Portfolio Opportunity (FPO) program.
In recent times, SEBI (Securities and Exchange Board of India) has demonstrated a strong desire to regulate the industry by requiring managers to adhere to a set of codes of conduct.
A move in the right direction will lead to increased transparency and discipline within the segment, which is a healthy development.
Summing up, The government’s policies and regulatory frameworks have had a significant impact on the Indian real estate market.
Development, affordability, and transparency have all seen improvements due to programs like RERA, GST, and PMAY.
Although challenges persist, there is a positive trend overall, with a growing focus on inclusive growth and eco-friendly approaches.
A combination of government support and market forces bodes well for India’s real estate market.
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