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t’s due to in­creas­ing mi­gra­tion to the cities that ur­ban­i­sa­tion has be­come an ur­gent re­quire­ment and hence we are wit­ness­ing grow­ing real es­tate de­mand from all over, in­clud­ing tier-II and tier-III cities of In­dia.

With rapid land and in­fra­struc­ture de­vel­op­ment in smaller cities and towns, higher earn­ings and im­proved stan­dards of liv­ing, de­mand for hous­ing and con­struc­tion is con­stantly in­creas­ing. Even smaller towns are ex­pe­ri­enc­ing a boom in real es­tate. All this re­flects a healthy trend and pos­i­tive out­look for both real es­tate and in­fra­struc­ture sec­tors in In­dia.

As per an es­ti­mate, the coun­try's ur­ban pop­u­la­tion is ex­pected to soar to 590 mil­lion by 2030 and hence it is ur­gently re­quired for heavy in­vest­ment in the next 20 years over mod­erni­sa­tion of ur­ban in­fra­struc­ture. This grow­ing de­mand can be con­sid­ered as a healthy sign, but ev­ery­day ris­ing in­put costs is ham­per­ing the growth of real es­tate sec­tor in In­dia.

Even though real es­tate has been af­fected by high in­fla­tion, still it has been far bet­ter than gold or stock mar­kets. This may be one of the rea­sons why In­dian con­struc­tion and real es­tate sec­tor continues to be a favoured des­ti­na­tion for global in­vestors also.

For­eign in­vest­ment

Sev­eral large global in­vestors have al­ready part­nered with lo­cal in­vestors and some of the de­vel­op­ers for in­vest­ing in the In­dian real es­tate mar­ket. This is ex­pected to re­sult in high trans­ac­tion ac­tiv­ity in realty and in­fra­struc­ture in the com­ing months and years, es­pe­cially in res­i­den­tial real es­tate seg­ment. Pri­vate eq­uity play­ers are also find­ing the real es­tate in In­dia an ex­cel­lent in­vest­ment op­por­tu­nity as the re­turns have been ex­cel­lent in the last few years. They opine, “It pays to buy property in In­dia and keep it for some time

for in­vest­ment pur­poses. And the re­turns can be seen in just a cou­ple of years."

Lately, the real es­tate sec­tor in In­dia has also wit­nessed in­creased recog­ni­tion as an in­fra­struc­ture ser­vice that is driv­ing the eco­nomic growth of the coun­try, but still its con­cerns are not be­ing paid at­ten­tion prop­erly. For ex­am­ple, real es­tate de­vel­op­ers to­day are strug­gling with the ris­ing price of land, labour and in­put costs, be­sides high bur­den of taxation, high cost of project fund­ing, and de­lays in get­ting var­i­ous clear­ances and ap­provals.

As per the lat­est re­port of the Min­istry of Hous­ing and Ur­ban Poverty Al­le­vi­a­tion, the ex­ist­ing hous­ing short­age is es­ti­mated at 18.78 mil­lion dwelling units and this sit­u­a­tion calls for an over­all struc­tured and mas­sive hous­ing pro­gramme. In fact, we ur­gently re­quire to re­struc­ture our over­all ap­proach, so that we can meet this tar­get and the sec­tor can con­trib­ute sig­nif­i­cantly to the In­dian econ­omy.

In­fra spend­ing

Need of the hour is to cre­ate sim­ple and ef­fec­tive po­lices to ease real es­tate ap­proval pro­ce­dures. For this pur­pose, fa­cil­ity of sin­gle win­dow clear­ance should be ac­ti­vated as soon as pos­si­ble. Fur­ther, more and more in­fra­struc­ture spend­ing is re­quired in ur­ban ar­eas, so that world-class real es­tate projects can be de­vel­oped in the coun­try at af­ford­able costs. Also, this should be fol­lowed by favourable RBI poli­cies in terms of eas­ing the repo rates and re­lax­ing CRR, SLR etc. This step will in­ject liq­uid­ity into the real es­tate sec­tor which is strug­gling since long.

Fun­da­men­tal in­dus­try driv­ers such as lower in­ter­est rates, in­fra­struc­ture de­vel­op­ment, and the re­newed in­ter­est of in­ter­na­tional in­vestors in real es­tate can en­sure a pos­i­tive out­look for the real es­tate and in­fra­struc­ture over the next cou­ple of years.

Al­ready, in­vest­ment of pri­vate eq­uity funds has risen sig­nif­i­cantly dur­ing the last three years for in­vest­ment in in­fra­struc­ture sec­tor. For­eign in­vestors are also look­ing at in­vest­ing in small and medium to large projects across In­dia. All this re­flects a healthy trend and pos­i­tive out­look for the coun­try.

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