The ‘Housing for All’ by 2022 initiative is a potential game changer. Economic recovery is expected to gain momentum, driving the demand for affordable housing. The housing sector in India holds tremendous potential to have a positive effect on the economic and social development of the country. The realty sector will benefit because of a number of incentives like subsidized land, higher Floor Space Index, timely approvals, concessions and tax exemptions, funding to name a few are necessary to aid development of housing projects.
The growth of the housing sector has had a multiplier effect on the Indian economy and has been a big driver for economic growth. The housing sector generates direct mass employment for unskilled, semiskilled and skilled laborers as well as many white collared workers, indirectly also many more jobs are created. The governments at both the state levels and the center have a crucial role to play in giving a boost to the realty sector and hence a boost to the Indian economy.
The Center has already brought in certain positive changes by introducing the Land Bill and seeking to introduce a Real Estate Regulation Bill to regulate the housing sector. The relaxation in External Commercial Borrowing [ECB] norms for affordable housing and the proposal to further relax FDI norms for housing projects will ease the flow of funds and will lead to more supply. The development of India’s real estate sector will have a direct and indirect bearing on India’s economic growth, employment and other industries and sectors, so the faster the reforms are initiated the faster the economic growth.
India is on the verge of great urbanization and within 15 years the GDP will rise from 31% to 75%. Cities are referred to as engines of economic growth. More housing, better infrastructure, all these factors are critical and hence real estate sector will play a crucial role in shaping the Indian Economy.
Some of the trends that will dominate this sector include:
Lower Interest Rates
Tier II and Tier III Cities
Single Window Clearance and Real Estate Bill.
All this will give a boost to the real estate sector which in turn will be crucial in shaping the Indian economy.
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