Key stakeholders in the Real estate industry are advocating for the grant of Industry status, which they believe would provide essential funding and streamline regulatory processes. This long-standing demand is seen as critical for igniting growth across the sector, benefiting not just real estate but also over 200 allied industries. With real estate being a cornerstone of the Indian economy, the industry’s push for fiscal reforms aligns with broader goals of economic development and job creation. Stakeholders like Pradeep Aggarwal, founder and chairman of Signature Global India, highlighted that granting industry status could invigorate the economy, offering affordable funding and quicker approvals for developers. Murali Malayappan, chairman of Shriram Properties, echoed these sentiments, calling for GST rationalization and the restoration of input tax credits to support under-construction properties. Furthermore, experts are advocating for tax reliefs and incentives aimed at improving housing affordability, which is crucial for stimulating demand in the sector. The expectation is that these reforms will not only benefit developers but also significantly aid homebuyers facing financial burdens. As the industry anticipates these much-needed changes, the focus is also on enhancing sustainability and addressing the rising demand for rental housing, senior living, and student accommodations. The upcoming budget is expected to serve as a turning point for the real estate sector, potentially reshaping its future landscape.
Industry Status and Financial Reforms: A Game Changer
One of the primary demands from the real estate sector is the recognition of industry status. This designation is believed to unlock affordable financing options and simplify regulatory frameworks. Pradeep Aggarwal emphasized that such a change could lead to job creation and enhance economic activity across various sectors. He stated, “Granting industry status to real estate could invigorate over 200 allied sectors.” Similarly, Murali Malayappan pointed out the necessity for GST rationalization, especially for under-construction properties, to support the sector’s growth. The call for financial reforms also includes the reintroduction of Section 80IBA incentives, which could significantly boost affordable housing development. G. Hari Babu, national president of NAREDCO, highlighted the potential benefits of restoring interest subvention under PMAY for loans up to Rs 6 lakh. Such measures could enable homebuyers to access housing loans at lower fixed interest rates, which would enhance affordability and stimulate demand. Real estate executives also stress that enhanced tax reliefs and increased funding are critical for realizing the sector’s full potential.
Tax Reforms and Sustainability: The Path Forward
The demand for tax reforms has been a focal point of discussions surrounding Budget 2025. Experts within the industry are advocating for increased exemptions on home loan interest and principal, with some suggesting that raising the tax exemption limit to Rs 5 lakh would significantly alleviate financial burdens on homebuyers. Dhruv Agarwala, group CEO of Housing, reiterated the need for revising home loan interest exemptions, which have remained unchanged for years. Additionally, stakeholders are pushing for tax incentives specifically for Real Estate Investment Trusts (REITs), arguing that simplifying access to funding for real estate developers could provide much-needed liquidity to the market. Another crucial area of focus is rental housing policies, which require reforms to ensure affordability and encourage investments. Niranjan Hiranandani, chairman of NAREDCO, has called for the elimination of notional income from house property held as stock-in-trade. This change would incentivize rental housing investments, aligning with the government’s ‘Housing for All’ agenda. Moreover, the demand for sustainability in construction is also on the rise. Rakesh Reddy, director of Aparna Constructions, highlighted the importance of financial incentives for adopting sustainable building practices. The combination of these reforms is expected to create a more conducive environment for both developers and homebuyers, driving growth in the sector.
Conclusion: Anticipating Positive Changes Ahead
Stakeholders are optimistic that the government will take actionable steps toward granting industry status and implementing necessary fiscal reforms. Such changes could reshape the landscape of real estate in India, promoting growth and sustainability.
- Industry status could unlock affordable funding and streamline processes.
- Tax reforms are essential for enhancing housing affordability.
- Sustainability initiatives are in demand from industry leaders.
- Rental housing policies require urgent reforms for investment incentives.
- Stakeholders anticipate measures benefiting both developers and homebuyers.
- Upcoming budget may serve as a turning point for the sector.
