If all of these changes are introduced, the real estate market will be placed on a fast track that it hasn’t seen in a long time. The real estate industry is one of India’s largest employers and contributes significantly to the country’s economy. However, it has suffered greatly as a result of a variety of factors over the last few years. The Indian government and some state governments have taken steps to assist the real estate sector by providing some concessions. Due to various malpractices in the process of project financing, coupled with the increasing credit risk among developers, the Indian government has slammed the brakes on financial institutions, causing financial institutions to pull the plug on the real estate market.
The following reforms can be considered by the concerned authorities to complement and assist the real estate sector is recovering from the current recession, which is long overdue:
I) Infrastructure Status: While affordable housing has been granted the status of “infrastructure,” allowing it to benefit from lower interest rates, tax cuts, and increased inflows of international and private capital, the same has not been granted to the real estate sector. One of the main demands of the real estate sector has been and continues to be the status of ‘infrastructure.’
Granting the real estate sector the status of “infrastructure” will assist developers in receiving a variety of benefits, including those mentioned above, as well as assisting in the difficult task of raising funds for projects.
ii) Land Pooling: Under the Right to Equal Compensation and Fairness in Land Acquisition, Reconstruction, and Relocation Act of 2013, it is seen as an alternative to land acquisition that is more favourable to a landowner and less costly for a developer. Landowners are less prone to land pooling because they are not required to give up their properties but rather chose to do so. As a result, the government can consider further incentivizing land pooling for developers through reforms such as allowing higher floor area ratios for construction on pooled land. Also, clarifications on the tax consequences and stamp duty application for land pooling should be given.
iii) Simplifying the Procedure for Obtaining Building Approvals: The procedures for obtaining building approvals vary by state in India, resulting in inconsistency in the method. Although some states, such as Maharashtra, have implemented a single-window clearance system for building approvals, the majority of Indian states still lack such a system. furthermore
Despite being one of the main contributors to the country’s economic growth and jobs, the real estate sector has suffered substantial losses as a result of the government’s lockdown and other factors. If introduced, a combination of the above-mentioned reforms would place the real estate sector on a fast track to a boom that it hasn’t seen in a long time.