“Real estate in India is on a path to recovery since the initial wave of pandemic-induced lockdowns, thanks to short-term measures such as the reduction in repo rate by the RBI and the subsequent decrease in home loan interest rates. However, to ensure that the sector continues to register strong growth in the long run, the government must make certain policy interventions to revitalise market demand and support players operating in the space. Reduction in GST on construction materials will help bring down costs further. Extension of GST reduction benefits to ancillary industries will automatically lead to support to the Real Estate industry. From a buyer’s point of view, income tax relief such as increasing the deduction on Principal repayment under 80C for home loans will prove beneficial to the sector. Measures such as relaxing stamp duty on property purchase and reducing the income tax on owning a second home will also boost consumption. Furthermore, the industry could use establishing more funds for the developers to initiate new large-scale projects for creation of residential townships and business parks, like the SWAMIH Fund is for the stalled affordable housing and brown-field projects. Implementing these measures will boost confidence amongst both consumers and real estate developers, enabling the sector to build on its robust FY 2020-21 Q3 performance and accelerate its recovery, which is extremely crucial to the economy where Real Estate can be a nearly 7% contributor to the GDP.”
