What Indian Realty Sector Expects from the New Govt

A new Central government was elected in the country on May 16th. Various industries that were reeling under economic pressures over the last one year have many hopes pinned on the new Modi government. The country’s realty sector too is hopeful about good days ahead in terms of its revival. At the same time, it also has a few expectations from the government in order to reverse the downward sentiment in the industry.

Realty sectors’ expectations

Realtors have several expectations from the new government such as affordable housing, single-window clearance and an industrial status for the sector among several other expectations. Here are some of the expectations they have on the priority list.

1. Affordable housing

Affordable housing is currently high on the priority list for developers as well as property buyers. A major segment of house buyers in the country is the middle class segment. However, due to inflation and increasing property prices in several tier-I cities, buyers are unable to purchase property. Properties across the country are unsold due to lack of buyers. As such, buyers as well as builders are looking forward to policies from the government to bring about more relief for affordable housing.

2. Goods and Service Tax (GST)

Adopting a national level GST may be a challenge for the Central government, as several state authorities may feel threatened over their tax autonomy. However, the logistics and warehousing companies will be the biggest beneficiaries, as they could achieve desired economies of scale and become more streamlined. These also have a direct and favourable implications on the real estate sector. Builders may expect streamlining of taxation processes, and this will free them up from disparate government levies such as stamp duty, electricity duty and so on.

3. Infrastructure improvement

A good infrastructure such as good roads, express corridors, SEZs, electricity, water supply and mass transportation facilities such as BRTS, metro and monorails will any day boost the specific real estate market. Many developers are hoping that the new Prime Minister will be able to improve the infrastructure across the country, the same way he did it in Gujarat.

4. Land use policy

The new government is expected to streamline the process of land acquisition especially, acquiring land that cannot be cultivated, on the lines of the existing National Land Use Policy. The National Land Use Authority will govern the policy framework and will have to work closely with state authorities, and possibly at the district level. The government is also expected to set up a countrywide real estate regulatory authority to ensure proper implementation of the Real Estate Regulatory Bill once it is passed.

5. Addressing the economic condition

One of the major deterrents for the real estate sector in the country has been the bad economic situation in the country, the current job scenario and the depreciated rupee value. Addressing this was on the priority list of the new ruling party’s manifesto and the country’s real estate sector will be looking forward for the new government to deliver on their promise.

6. Single window clearance system

One of the problems that has been plaguing the Indian real estate sector is the endless delays in obtaining the necessary approvals. This directly impacts the construction of a project. Delays in project completion and increasing costs due to inflation are key by-products of these delays. There has been a constant demand for a single window clearing system for expediting approvals by the developers. Bringing this to reality is one expectation of developers across the country.

While the expectations are high, one must realize that no government will be able to implement all the policies within a short period. It may take time for implementing these policies. It must also be noted that while sales may pick up in the wake of a new government, the real estate prices may not head north immediately. It may take 6-12 months for prices to rise. However, developers may be able to look at faster policy implementations from the Centre as the government may not face too many hurdles while passing bills, due to fewer coalition parties at the Centre.