The real estate sector is crucial for India’s economy, contributing significantly to GDP and employment. To address its challenges and foster growth, the NDA government should consider several strategic measures. Streamlining regulatory approvals is essential, as lengthy approval processes delay projects and increase costs. Implementing a single-window clearance system and simplifying compliance requirements can ensure uniformity and reduce delays. Enhancing financial accessibility is also critical, given the limited access to finance and high borrowing costs. Encouraging affordable housing finance options and promoting Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) will attract investment and provide liquidity.

Addressing the demand-supply mismatch is another priority. The imbalance between high-end housing supply and affordable housing demand can be mitigated by providing tax incentives for affordable housing projects and revising urban planning norms for efficient land use. Tackling non-performing assets (NPAs) is vital for financial stability. Establishing a stressed asset fund for distressed projects and streamlining Insolvency and Bankruptcy Code (IBC) processes will protect homebuyers. Promoting sustainable development by mandating green building standards and investing in smart city projects for efficient urban management is equally important.

Boosting the underdeveloped rental housing market involves implementing the Model Tenancy Act and encouraging public-private partnerships to develop rental housing. Leveraging technology and innovation is crucial, with steps like accelerating the digitization of land records and supporting PropTech innovations to streamline transactions. Strengthening RERA implementation by ensuring uniform enforcement and investing in capacity building for RERA authorities will enhance regulatory effectiveness.

Encouraging Foreign Direct Investment (FDI) requires relaxing FDI norms and developing clear policies to attract international investors. Addressing legal and land acquisition issues is also necessary to prevent project stalling. Reforming land acquisition laws and establishing fast-track courts for dispute resolution will expedite processes. By implementing these measures, the NDA government can significantly support and improve the real estate sector, driving economic growth and development in India.

Comments by Industry Experts:

Mr Amit Goyal, Managing Director, India Sotheby’s International Realty

We congratulate the NDA government on their significant majority win and extend our congratulations to Shri Narendra Modi for being sworn in as India’s Prime Minister for the third consecutive time.

As part of its first 100 days agenda, we believe the NDA government should consider and take decisive steps to support and improve the real estate sector. Firstly, the Real Estate (Regulation and Development) Act 2016, a landmark Act enacted by the BJP-led government, should focus on its stricter enforcement. Several states have diluted its provisions, leading to non-compliance with orders passed by Regulatory Authorities. Improved checks and balances are essential to ensure accountability and transparency.

Another important area to address is the significant additional costs, especially the levied taxes on real estate transactions. The government should consider reducing stamp duty and moderating the GST burden on under-construction projects to maintain buying momentum, a key accelerator for GDP growth.

Streamlining project approvals through a single-window clearance system is also critical. Approval delays remain a significant bottleneck, and addressing this will expedite project timelines and reduce costs.

Additionally, increasing income tax exemption limits on home loan repayments and interest, which have not been adjusted since 2014, would provide much-needed relief to homebuyers and stimulate demand.

Last, but definitely not the least, better urban planning is crucial. Cities are under tremendous pressure, and implementing master plans is vital for sustainable development. For instance, despite the Delhi Master Plan MPD 2041 being ready, it has not been notified for over a year. Prompt implementation of such plans is essential to manage urban growth effectively.

Mr Badal Yagnik, CEO, Colliers India

The real estate sector expects continuation of structural reforms and policy support from the new Central government. RERA & GST implementation, national policies specific to logistic parks & data centers and overall infrastructure push in the form of National Infrastructure Pipeline & Gati Shakti National Master Plan have instilled a sense of confidence amongst various real estate stakeholders in the last decade. These long-term measures to balance growth while maintaining fiscal discipline will be pivotal to drive equitable public & private investment in the economy. A progressive and an economically viable vision is inevitable if real estate sector is to reach a USD 1 trillion market, forming 13-15% of the country’s GDP by 2030.