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States » East

Modi 2.0 – Indian Real Estate hopes for further revival

Kolkata, May 24 (UNI) The Modi Government is credited with bringing some emboldened steps to vitalize and boost Indian Real Estate Industry, according to Ankit Kansal, MD& CEO, 360 Realtors.
RERA, Demonetization, REIT & GST have been instrumental in bringing the industry towards more organization, transparency and structure. The government has also taken prudent steps to boost the infrastructure in the form of affordable housing, industrial corridor, smart cities & much more, he said.
Mr Kansal said with a clear majority and mandate, it is evident that in its 2ndinstallment, the Modi 2.0 will continue to strengthen its initiatives along with undertaking broader reforms. Indian Real Estate already undergoing a revival, as transaction volumes have picked up Y-o-Y to the tune to 45-60 per cent in major Indian cities.
A strong mandate will further instill confidence in the sector and contribute to building momentum, he said.
According to Kansal, Real Estate in India is expected to pick-up in the times ahead on the back of a favorable economic outlook. In 2019-2023, Indian economy is expected to grow by around 7%, thereby uplifting Real Estate demand in the country. It is also anticipated that more liquidity will be infused into the system, which will result in spurred investments by stimulating consumer spending. The government has also pledged to invest around INR 100 Trillion into Indian infrastructure.
He said Mr. Modi has always been very NRI friendly and holds a distinct position in the diaspora. Such a landslide victory will naturally result in more confidence amongst the NRI populace. In FY 2018-19, NRIs have poured around USD 11 billion into Indian Housing industry, as per estimates by 360 Realtors. The numbers expected to rise in the times ahead.
Mr Kansal said institutional investors will pour in more money into the Indian Real Estate. Over the years, with a string of policy reforms such as RERA, Demonetization and GST, Indian Real Estate features high on the radar of global and domestic institutional investors. Of the USD 30 billion of institutional money that has come during 2009-2018, around two-third had been invested in the last 4 years only. Interestingly, around 70% of such capital has emanated from the international origin. This indicates a paradigm shift in the investment pattern over the past few years.
A stable and majority-based government will further instill confidence amongst international and domestic investors. It is expected that the institutional money will double in 2019 to USD 10 billion on the back of strong government in the center, he said.
Mr Kansal said the government will take further steps to streamline the RERA implementation in the country. The industry has been waiting for faster/ single window clearance since long and the new government should take proactive steps in this direction. A faster window will also help in rationalizing the cost of development and make Real Estate more affordable thereby boosting demand.
The government should also take initiatives to redress the recent NBFC crisis that has affected developer funding in the country. Despite the recent revival in the market, Indian Real Estate suffers from a huge pile of unsold inventory and delayed projects. The government intervention is highly required to tackle the crisis, he said.
In 2015, the Modi government announced that by 2022, there will be housing for all. The government pledged to build 29.5 million new rural homes and around 12 million urban homes. As the government has been reelected “ The Housing for All schemes” will gain steady momentum. If not in 2022, then at least by 2024, it might reach fruition, Mr Kansal said.
He said the industry expects rationalization of taxes by merging stamp duty under GST. This will give a major push to the industry & help in reducing the cost of construction. Likewise, rationalization of GST on cement is also expected, which is right now to the tune to 28%- one of the highest in the country.
Similar to the affordable housing projects, the ambitious smart city plan has been incubated in the 1st term. It is expected that the plan will receive continued efforts from the government to reach its logical conclusion, Mr Kansal added.
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