New Delhi: Like most other business sectors, the Indian real estate market holds its breath for a stronger and more determined government. The perception which is currently driving market sentiments is that market momentum can either accelerate, remain unchanged or decelerate depending on which party is voted into power. Speaking purely from the viewpoint of market sentiment, there is some validity to this perception. However, the fact is that the true benefits of political stability and proactive reforms - if these indeed ensue - will not be visible or tangible for quite a while after the new government takes over.
Even if the next government proves to be 'real estate friendly', it has its work cut out for it. There are vital regulations and initiatives related to real estate that have been gathering dust on bureaucratic tables which need to be fast-tracked and implemented. Though these regulations and initiatives are crucial for the real estate sector's growth, there are various complexities that must first be sorted out. One of the challenges is impartially attending to the interests of all industry stakeholders. The other challenge is to shore up all loopholes that could remain and be exploited if not identified prior to a regulation's implementation.
This is especially true of the pending Real Estate Regulatory Bill, which has been hotly contested at every stage. There is no doubt that it must be enacted sooner rather than later so as to make Indian real estate more attractive for foreign investors. However, it does appear that no version of this Bill that emerges after the various objections and arguments from the industry's stakeholders have been considered will be accepted across the board. If this is the case, it will require a strong and determined government to push it through. This also applies to the regulations pertaining to FDI in multi-brand retail - a subject that has drawn an incredible amount of political flak - which would have a major impact on India's attractiveness as a destination for foreign retail heavyweights.