Real estate needs infrastructure status

Realty is the second largest employment provider in the country, next only to agriculture. The sector is expected to employ over 60 million people and reach $180 billion by 2020, comprising 11 per cent of the GDP

The Union Budget should reflect the far-reaching magnitude of the real estate sector, which has a multiplier effect on the growth of the entire economy. It is the second largest employment provider in the country, next only to agriculture. The sector is expected to employ over 60 million people and reach $180 billion by 2020 comprising 11 per cent of the GDP. With the growing economy and the rising GDP, the momentum is only going to speed up.

The real estate sector has witnessed many transformative reforms over the past few years. These reforms have revived consumer confidence and laid the foundation for massive growth. The key drivers of growth for the sector are regulatory reforms including RERA and GST, relaxation in FDI which will encourage more investment, steady demand generated through urbanisation, rising household income and the emergence of affordable housing.

The real estate sector expects supportive measures from the Union Budget that will improve upon the recently gained momentum. The granting of infrastructure status to the entire real estate sector is at the forefront of our expectations. We have seen the impact of infrastructure status on affordable housing with many reputed developers now launching projects in the affordable segment.

The sector also looks forward to a streamlined approval process with Single Window Clearance. This will ensure project approvals to be processed more quickly, resulting in reduced construction costs, thereby substantially reducing property costs.

Furthermore, the sector will benefit from revised income tax slabs that reduce overall tax expenditure. This will enhance the ability of the salaried class to invest in real estate. Expanding the availability of income tax deductions for home buyers can incentivise new buyers and widen the market opportunity.

(Rakesh Reddy is the Director of Aparna Constructions & Estates)