Real Estate Industry

[op-ed snap] Indian real estate is on an upward trajectoryop-ed snap


Note4students

Mains Paper 3: Economy | Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth

From UPSC perspective, the following things are important:

Prelims level: Particulars of the RERA, PMAY, etc.

Mains level: Newscard briefly discusses some important reforms done by the government in the Real Estate Sector


Significance of the Real Estate (Regulation and Development) Act 2016 (RERA)

  1. The act brought unprecedented levels of transparency into real estate projects
  2. RERA promises to minimize delays in projects, weed out unscrupulous developers, and provide homebuyers with detailed information on the specifications and the progress of the projects they invest in
  3. The Real Estate sector also got benefited due to simultaneous implementation of the RERA and the GST

Other government’s efforts for encouraging Real Estate Sector

  1. The sector will also benefit from the amendments that were made late in 2016 to the Benami Transactions Prohibition Act
  2. This, coupled with the central government’s stated intent to make Aadhaar linkage compulsory for all property transactions, will help in curbing malpractices and stopping the inflow of black money into real estate
  3. The recapitalization of banks will also rejuvenate the banking sector and give a boost to lending(for the sector)

Positove Consequences of these reforms

  1. These reforms will bring transparency and accountability in the sector
  2. Developers need to be sufficiently funded to achieve RERA compliance
  3. Small or cash-starved developers will probably have no choice but to partner with larger, established players to survive
  4. Moreover, unscrupulous developers—big or small—will have no place to hide in the transparent environment that RERA will usher into the industry
  5. The real estate sector will be institutionalized, and probably have fewer—but larger and more reliable—developers in the years to come

Pradhan Mantri Awas Yojana (urban) (PMAY)

  1. The PMAY were amended to encouraged married or single people to invest in property
  2. The government is trying to attract both middle-income and low-income groups to this segment
  3. In September, the central government extended, under PMAY, the benefit of interest subsidy on home loans for households in the middle-income group
  4. This scheme was originally scheduled to end in December, but has now been extended till March 2019

New policies by the government

  1. The Union budget for 2017–18 granted infrastructure status to the affordable housing segment
  2. More recently, the ministry of housing and urban affairs introduced as many as eight public-private-partnership options to encourage private investments in affordable housing projects
  3. These new policies, if implemented well, could give a much-needed boost to this segment and make it a powerful growth driver for the real estate sector

The way forward

  1. A boom in affordable housing and the resulting construction and allied jobs can help make a significant dent in the malaise of joblessness
  2. It can also have a multiplier effect on the national gross domestic product, and boost the demand for different categories of products and services
  3. India’s real estate is transitioning to a new era after what has been a rather eventful year

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Real Estate Industry

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