Budget 2025 : Why Does The Real Estate Sector Want Industry Status?

The real estate sector has its long pending ask of granting it industry status. The real estate industry is eagerly looking forward to the upcoming Budget announcements and expects the government to consider this ask in the upcoming Budget of 2025.

Why Grant Industry Status?

The sector heavily relies on banks, NBFCs, and private investors for project development funding which is often at higher rates. “Granting industry status would enable the developer community to procure funds from banks and NBFCs at relatively lower interest rates, and refinance existing obligations as it will significantly bring down the project cost,” said Sandeep Chhillar, Founder and Chairman of  Landmark Group.

Having an industry status will also make the real estate more organized boosting investors' confidence and encouraging higher FDI inflows. It would also ease approval processes, and fast-track licensing clearances, further infusing more transparency in the system.

“As the second-largest employment generator, this move would enable the real estate sector to drive economic growth more effectively by enabling more project development resulting in significant job opportunities in the sector and its ancillary industries,” added Chhillar.

Siraj Saiyed, Director, of Arete Group said, “Since real estate accounts for about 7% of India's GDP and is projected to reach $1 trillion by 2030, this can be a game changer for the sector.” It will improve transparency and accountability and make India an even stronger investment destination globally.

The inudtsy experts also said that there is a need to deploy concentrated policies for the real estate sector so that the industry can become an Iron pillar of the Indian economy. Steps to foster affordable homes in India, tax incentives for developers, single window clearance, and tax reductions in home loans can go a long way to help the industry thrive and evolve. Likewise, governing bodies should also mull about creating a more conducive environment for prop-tech ecosystems in India with the help of incentives, subsidies, funding of research activities, and facilitating partnerships between academia and industry bodies.