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Budget 2024: Realty sector wants industry status from Modi government

The Indian real estate market is poised for robust growth, backed by supportive government policies aimed at affordability and sustainability. Developers advocate for lower lending rates in the affordable segment and an expanded definition of affordability.

Edited By: Nitin Kumar @Niitz1 New Delhi Published on: January 14, 2024 20:15 IST
Budget 2024
Image Source : FREEPIK Skyline skyscrapers under construction.

The real estate market is on a strong footing, and the segment is poised to grow vigorously in the coming years. The regulatory bodies and government have played a pivotal role in growth by integrating affordability and long-term sustainability. Lowering the lending rates in the affordable segment and tweaking the definition of affordability so that a greater number of households can come under its ambit are key demands from the developers.

According to Gurmit Singh Arora, national president of the Indian Plumbing Association, Indian urban centers still suffer from acute housing shortages, and reports have suggested that by 2030, India needs an additional 25 million homes to bridge the gap. 

Developers should be incentivized via better funding options, tax discounts, and R&D support, he said.

Real estate plays a critical role in the economy and contributes to around 8 per cent of the GDP. It is also the second-biggest employment generator after the agriculture industry and more than 200 ancillary industries rely on it.

LC Mittal, director of Motia Group, said that the government should take proactive steps to boost demand, rationalise costs, and reduce regulatory bottlenecks.

"In the coming budget, the governing agencies should look into giving real estate the industry status that is long overdue, alongside mulling over single window clearance, tax breaks, and GST rationalisation," he said.

Indian real estate peaked in 2023 with sales close to 5,00,000 in major cities, growing YoY by 31 per cent. The bullish sentiments in the market will likely continue in 2024, backed by a healthy macroeconomic outlook, stable lending rates, and an upbeat job market.

The government, according to Anurag Goel, director of Goel Ganga Developments, should consider increasing the tax rebate on personal income tax to attract buyers and boost demand.

"The government should look into other parameters, such as offering tax holidays to developers, among others," he said.

"Govt should take a close look at both supply sides and demand drivers to help the sector grow further and mitigate any potential risk. To boost demand, it should think about increasing the tax rebate on home loan interest, reducing the capital gain tax and further lowering interest rates for the EWS segments," Aman Gupta, director at RPS Group, said.

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