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Last updated: January 7, 2015 at 14:17 pm

Has Government Finally Started Taking Real Estate Domain Seriously?

Indian real estate market has a come long way from having an image portraying a property dealer and customers or construction of buildings to now being a full-fledged sector. Real estate sector in India has been hungry for investors, good projects, affordable housing and some foreign interest for a long time now. Moreover, the government did take much interest into the sector but the end results were not yielding sweet fruits.

The times have changed now and the Indian realty sector is getting the much deserved attention and there are a good number of foreign investors who have been peeping into and accessing the sector through the success of the global economy. The positivity has given a good positive thrust to the Indian government’s protocols and the result is there in front of everyone; a flourishing sector.

Here’s an illustration of the realty sector in India, at the moment:

imageSource: India Brand Equity Foundation.

Here are some of the positive entities that have helped the sector to shine on global landscape and now the world knows that Indian government is now indulged in here completely:

1. A Relief in the FDI Policy

The Indian economy has undergone the state of liberalization in the late 1990s. This has resulted into an increased flow of foreign direct investments in India and its real estate sector. Recently, the government has pumped in a lot of relief into the policies pertaining to the investments coming from the foreign lands. Moreover, the Union Budget has also declared clauses that will help the capital rotate within the sector in an apt way. The excerpts are enlisted below:

  • 100% of FDI will be routed towards stationing and promotion of townships, built-up infrastructure and construction development projects
  • The Department of Industrial Policy and Promotion has permitted FDI inflows towards constriction of commercial infrastructure, such as hospitals, educational institutions and recreational facilities
  • The hibernation period of the real estate domain is over as FDI inflows are expected to reach to a whopping 16 billion dollars by 2015

2. Supportive Clauses in the Union Budget-2014-15

The Union Budget 2014-15 proved to be a boon for the realty market in India and the much awaited relief finally reached the domain. Finance minister, Arun Jaitely publicized following pointers for the keen followers, organizations and realtors across the nation:

  • The Union Budget 2014-15 has laid emphasis on the real estate sector and especially on the housing market
  • Real Estate Investment Trust(REITs) will soon be allowed in India
  • REITs, here in the Indian realty market would get a status of being a tax pass-through organization. With this, Infrastructure Investment Trusts would also be receiving tax benefits
  • There will be a boost in the common man’s spending power and the domestic investment processes will see a surge

3. Linking With Global Economy

Countries are partnering with each other and are executing business transactions with each other. Companies operating in the industrial sectors in a particular country in Europe or Eastern Asia, for example are happily stationing their branches in different other nations, globally. This has not only given rise to an urban landscape but has also created a lot of employment opportunities for people.

The whole world is experiencing a high migration rate and this is the main reason that India, in particularly is witnessing a rise in the affordable residential spaces and absorption of commercial projects. Now the government is realizing the fact and thus is taking keen interest in nourishing the relations.

4. Rise of the Commercial & Retail Space

Mumbai and Bangalore are two Indian cities that are considered best for commercial real estate investment, with returns of 12-19 per cent expected in the next five years. The other Indian cities that are part of race are Delhi/NCR and Kolkata that also promises to offer a high rate of return on investments made. There are industries, such as IT and ITeS, retail, consulting and e-commerce, to list a few that have registered high demand for office area in the recent times. The government realizes the fact and thus has offered support to some of the big retailers and organizations to collaborate and begin huge commercial realty projects.

Voice of the Common Man: “Why Should We Care At All?”

The common now goes muddle-headed thinking about the possible benefits he may reap from these reforms. This can be easily explained through the fact that the real estate domain is experiencing a huge flow of capital and this will ensure better infrastructure. Here, better infrastructure refers to affordable yet luxurious homes and well-laid commercial zones. The common man can actually have better options to rotate his money and make his asset portfolio even better and stronger than the one formulated in the gone-by year.

[box type=”shadow” ]Author Bio: Vineeta Tiwari is a keen writer on Global Economy and Realty market. She has written articles on Global realty market and ongoing trends and tips for investors. An ardent reader, she is happy to pen down research based write-ups for global audience. Currently, she is professionally associated with popular realty portal, 99acres.com.[/box]

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