After demonstrating robust performance in recent quarters, the Indian real estate sector is looking forward to reforms in the upcoming Union Budget 2024. It is expected that the sector’s contribution to India’s GDP will increase from 8% to 13% by 2025. Furthermore, the long-term outlook suggests that the real estate sector is poised to achieve a market size of $1 trillion by 2030.

Key industry leaders expect that policy reforms will streamline processes, enhance transparency and drive growth.

Neeraj Sharma, MD, Escon Infra Realtors, says, “NITI Aayog’s forecast of the Indian real estate industry reaching a market size of $1 trillion by 2030 underscores its favorable long-term outlook. The industry is looking forward to government initiatives aimed at lowering input costs for steel, cement, and fuel. Meeting the longstanding requests for industry status and a streamlined clearance system would empower developers to obtain loans at reduced interest rates and take advantage of tax benefits. These measures would greatly enhance the industry and promote additional growth.”

The real estate sector is one of the key contributors to the country’s GDP. As developers and industry leaders continue to advocate for policy reforms, the focus remains on reducing construction costs, granting industry status, and implementing a single-window clearance system.

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Mukul Bansal, MD, Motiaz, says, “The real estate industry in India is experiencing rapid growth due to increasing housing needs. With the approaching Union Budget 2024-25, there is a strong anticipation for the sector to be granted industry status and for the implementation of a more efficient single-window clearance system. Meeting these long-standing demands would bring new energy to the sector. However, high taxes on essential materials such as cement and steel have led to an increase in housing project costs. The 28% GST on cement is especially worrisome, highlighting the urgent need for its adjustment to match the growing demand.”

Moreover, a key factor highlighting the need to support the real estate sector is its role as a major employer, offering jobs to a large number of casual laborers. Developers contend that incentivizing the sector could have extensive benefits beyond mere economic metrics, significantly improving the livelihoods of many individuals.

Shorabh Upadhyay, MD, Trisol RED, says, “The real estate industry plays a crucial role in driving growth in the Indian economy, and one of its pressing needs is to obtain industry status. This designation would allow developers to access loans at reduced interest rates, as well as take advantage of tax benefits and exemptions. Such support is particularly valuable during periods of economic hardship. Despite a strong recovery in recent years, the sector still requires ongoing assistance from the government to sustain its positive momentum.”

Harsh Gupta, CEO, Sundream Group, says, “Commercial real estate stands as a pivotal driver of the country’s GDP growth, warranting high expectations from the government ahead of the Union Budget 2024-25. Granting industry status to the sector would streamline credit access and reduce financing costs, which is crucial for meeting rising demand in commercial realty. The sector eagerly awaits measures to lower steel and fuel input costs and address the 28% GST on cement. In addition, implementing a single-window clearance system is essential for sustaining momentum and fostering entrepreneurship in commercial realty.”

These measures, coupled with incentives for sustainable practices and streamlined processes, have the potential to boost the sector’s growth significantly.

Ashwani Kumar of Pyramid Infratech says, “Although there is optimism within the industry, obstacles remain. The real estate sector is highly affected by prices, and the high taxes on essential materials like cement and steel continue to increase the project’s construction expenses. We urge the government to address this issue and eagerly anticipate a streamlined approval process. Real estate stands as one of the major job providers in the nation, and any measures that support the sector will positively impact the economy as a whole.”