Indian real estate industry looks to BJP to improve future conditions
The real estate sector facing crisis is neglected by the United Progressive Alliance (UPA) government but now the realty sector is banking its hopes on Narendra Modi and Bharatiya Janata Party (BJP) to improve its prospects. In the phase of economic instability, the real estate sector has been facing some stress. The industry is looking towards a strong and stable government that can bring real estate sector reforms.
The Confederation of Real Estate Developers Associations of India (CREDAI) has been quite critical of the UPA government’s policies. It complains that the real estate sector that contributes 6 percent to the country’s GDP, has been facing heavy taxes. This is responsible for high property prices.
One of the most important changes that has been hanging for some time is related to setting up of a real estate regulatory authority to protect the interest of property buyers.
BJP is supporting the issues faced by the real estate sector and party president Rajnath Singh has extended support to the association at its recent conclave in New Delhi. The party is also supporting corrective measures to liberalize the commercial real estate funding business, which is highly skewed.
It is a concern that banks’ exposure to the real estate sector is nearly 3 percent in India as compared with China 22 percent and US 30 percent. Real estate investment trusts (REITs) that promise retail investors safe investment with continuous returns and helps developers to raise funds without development risk have failed to take off in the past few years.
During the period of Atal Bihari Vajpayee government between 1998 and 2004, significant focus was given to the real estate sector and infrastructure development. Enabling policy measures like low home loan rates, tax relief on home loans and the National Highway Development Project contributed significantly to the economy, with record job generation of 67 million, against the 2.7 million in the UPA regime from 2004-10, as per official data.
Policies to bring real estate market and infrastructure development on fast track is already mentioned in the manifesto of BJP. It is interesting to see if real estate sector can get “Modi-fied” in the coming months.
Source: The Silicon India
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