Real estate is a major driver of the Indian economy, but when we consider the larger business environment in the country, it is still only part of the greater whole. When economic crisis hits, real estate is affected along with all other industries. In such troubled times, the policy-makers with whom the power to create a thriving economic is vested assume the task of balancing a policy and regulatory environment in which various industries exist and operate both in an independent and inter-linked manner.
It goes without saying that a country experiencing an economic crisis requires its present government to rethink its policies, or a new government. If there is a change in government, the new government must have a strong comprehension of the economy’s existing pain-points, and how the policies that govern the industries that drive the economy need to be individually and collectively boosted.
With the arrival of the Modi government, India is experiencing many welcome changes after many years of lackadaisical economic performance. With a strong, business-friendly government steering the country’s economy at the centre, various industries operating in the country began experiencing a revival in both sentiments and growth prospects. The newly-infused vibrancy in the country’s business climate was also expected to have a positive effect on the real estate sector, which looked forward to more support from the government by ways of proactive policies.
Unfortunately, the hoped-for remedies have yet to arrive in force. The agenda for reviving the country real estate sector is not a mystery – languishing regulations and clearly needed policy amendments need to be implemented. Among many other things, the government needs to fast-track GST, the land acquisition and resettlement bill and the real estate regulatory bill, and give a concerted push to single-window clearances for residential projects.
While the recent revision in the REPO rate by the RBI was expected to boost sentiments in the real estate market, the fact is that reduced interest rates alone will not suffice. The incumbent government must identify real estate as a priority sector, and roll out policy-level solutions to the problems that have compromised its growth. It is quite evident this festive season that developers have been very conservative about launching new projects. This has direct correlation to the fact that sales have been slow, and that the supply must also be moderated. However, it is necessary for consumer and investor confidence to return if the market is to see any serious revival.
This is where the deployment of policies like the Real Estate Regulatory Bill and Land Acquisition & Rehabilitation Bill would have a massive positive impact. The passing of these bills will render the Indian real estate market more transparent transparent, thereby boosting end-user and investor confidence.
Authored By: Arvind Jain, Managing Director – Pride Group
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