The key expectation from Budget 2025 by the real estate sector will continue to focus on improving the ease of doing business through tax structure reforms, a review of FDI norms to boost private and foreign investments in the sector, and enhancing liquidity for developers.
The real estate sector is closely tied to the infrastructure sector. Increasing investments in urban infrastructure, such as roads, public transport, and smart city initiatives, will provide a significant boost to the real estate sector. The recognition of real estate as an industry would unlock access to lower-cost funding, simplify approval processes, and attract substantial domestic and foreign investments.
The Indian real estate sector has long been the backbone of the country's economic growth. But still, its journey remains riddled with challenges that stem from being under-recognised in formal policy frameworks. Even though real estate is one of the largest contributors to the GDP, it is yet to gain the official status of an industry. As investors and developers, we add the real in real estate; if it would be declared as an official "industry" in the Union Budget, it would be a long-term vision come true. This recognition would be a big deal, and we could be off to races to build the next Dubai, Abu Dhabi or New York, here in India.
There are many challenges, such as access to formal funding, high borrowing costs, and a lack of effective regulations. Industry status could resolve many of these issues. There are three main benefits to this:
1. Ease of Credit Access:
If real estate is recognised as an industry, developers will be able to secure funds at lower interest rates. This will reduce project costs and ensure timely completion. It will also bring greater transparency and foster competition between developers and buyers.
2. Ease of Governance:
We look forward to a structured industry framework that would facilitate compliance, curb unethical practices, and promote fair practices among stakeholders. This would help build trust, transparency, and enhance the general credibility of the real estate sector.
3. Increased Foreign Investments:
Gaining industry status will also attract institutional investors, which will aid foreign direct investment (FDI), particularly in markets like affordable housing and commercial real estate.
Supported by strong performance and sustained growth, the real estate sector is at a crucial point in its growth trajectory. The sector is pinning high hopes on the upcoming budget announcements to address its long-pending demands for industry status and single-window clearance. The government must consider introducing policies and reforms to further amplify foreign and domestic investment into the sector, as this will strengthen market sentiment.
