Exploring the Impact of Policy Reforms: Over 3 Crore New Jobs Created in Real Estate Sector in the Last Decade

Employment in India’s real estate sector saw a significant increase, rising to 7.1 crore in the past year from 4 crore in 2013. This growth was fueled by a strong expansion in the housing segment, bolstered by various policy changes implemented by the Modi government.

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Anarock, a real estate consultancy, and NAREDCO, a group of real estate professionals, recently published a report titled ‘Real Estate Unboxed: The Modi Effect’. The report highlights how the Indian residential real estate market has significantly improved due to various reforms introduced by the Modi government. These changes have not only strengthened the industry but also enabled it to reach new heights.

The real estate sector accounts for more than 18 per cent of the total workforce in the country. India’s top seven primary residential markets witnessed a combined housing supply of 29.32 lakh units and sale of 28.27 lakh units between 2014 and 2023.

With profound initiatives such as the Real Estate Regulation and Development Act (RERA), Goods and Services Tax (GST), and various housing schemes like Pradhan Mantri Awas Yojana (PMAY), the government has aimed to reshape the landscape of the real estate sector in India in the past 10 years.

The market size reached USD 477 billion in 2022 and is projected to grow to USD 650 billion in 2025 and USD 1 trillion by 2030.

India’s real estate sector has traditionally been a significant contributor to the country’s GDP, accounting for 6-8 per cent of the total GDP during 2014-2017. Going forward, it is expected to double to 13 per cent by 2025,” the report said.

On the employment front, the report mentioned that 71 million people were employed in the real estate sector in 2023 as against 40 million in 2013.

After agriculture, real estate sector is an important provider of employment in India. As the sector continues to grow, we expect employment to grow multifold in the coming years.

Over 18 per cent of India’s workforce is employed in the real estate industry, which is a vital component of the country’s economy and is connected with over 250 ancillary businesses,” the report said.

Indian residential market has reflected an indomitable spirit that has weathered storms and embraced opportunities.

It has experienced a successful journey in the last 10 years, marked by strong demand, supportive government policies, and increased investor confidence. These factors are favourable for future growth prospects in this dynamic sector

The report tracked a decade of significant change in the Indian real estate sector, led by various game-changing reforms and policies like RERA and the SWAMIH alternate investment fund, which reignited confidence and hope in the sector.

Implemented across many states since 2017, RERA finally brought regulation to the real estate sector, safeguarding the interests of homebuyers by ensuring transparency, timely project completion, and accountability among developers.

According to the latest government data, approximately 1.23 lakh real estate projects have been registered across states since RERA’s inception to date, and more than 1.21 lakh consumer grievances have been addressed across the country.

Since its inception in 2019 till December 2023, the SWAMIH Fund has completed about 26,000 homes in the country, and 80,000 more are projected to be completed over the next three years.

The government backed SWAMIH Fund aims to provide financial support to stalled affordable and mid-income housing projects that were struggling due to capital shortfalls.

The report said the SWAMIH has played a crucial role in addressing the sector’s liquidity issues, especially amid challenging economic conditions.

The fund has also boosted the growth of many ancillary industries in the real estate and infrastructure sectors, having successfully unlocked liquidity of more than Rs 35,000 crore.

The report also highlighted the positive impact of various other government-backed initiatives such as PMAY (Urban & Gramin), GST, demonetisation, and the growing adoption of technology in the real estate sector over the last decade.

 

MahaRERA extends deadline for more than 540 lapsed housing projects

Officials informed The Times of India on Monday that the Maharashtra Real Estate Regulatory Authority (MahaRERA) has granted extensions to a total of 541 stalled projects in the state. Each project underwent separate hearings and received approval from the respective homebuyers involved for the deadline extension.

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With the Union ministry of housing and urban affairs (MoHUA) direction to all states last month to ensure that lapsed projects are completed so that homebuyers are not affected, MahaRERA has heard out the developers and given them time to finish the work.

A total of 356 projects have been given the extension, while 185 projects are in hearings and in the process of being given extensions.

The extension to any housing project comes with certain conditions for the developer to follow, said officials.

MahaRERA chairman Ajoy Mehta said the deadline extension is permitted only after due diligence and receiving a project completion guarantee. The aim is to get stalled housing projects completed and protect homebuyers’ interest, he told TOI, adding, “Some people have been complaining that MahaRERA grants extension to projects despite their grievances. I would like to reiterate that the extension is given only after strict scrutiny of all proposals and reasonable conditions to complete the stalled project. MahaRERA’s aim is to ensure a residential project gets completed under any circumstance and homebuyers get their rightful shelter.”

West Bengal starts converting land from leasehold to freehold ownership

The Bengal government has started implementing land conversion from leasehold to freehold, state commerce and industry minister Shashi Panja said after a cabinet meeting chaired by CM Mamata Banerjee on Thursday.

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The Bengal government has started implementing land conversion from leasehold to freehold, state commerce and industry minister Shashi Panja said after a cabinet meeting chaired by CM Mamata Banerjee on Thursday.

The conversion fees are based on lease duration. For a lessee of 99 years, 15% of the current market price will be charged while it will be 70% for 30-year lessees and 25% for assignees in between. The Land Ceiling Act imposes a limit of 24 acres for landholding, beyond which the excess land is vested.

According to the state’s conversion rules, state allows the conversion of leasehold lands settled for 30 and 99 years, including Kolkata Khasmahal land as well as land under WBIDC, WBIIDC and WBSIDC.

Industry experts foresee relief for lessees and a streamlined implementation of industrial projects, fostering easier access to bank credit for the industry.

Panja highlighted successful land allotment in the proposed hosiery park in Jagdishpur, Howrah, where 3.6 acres were allocated to 15 MSME units. She added that the textile hub project in Metiabruz is underway.

Can HIRA and RERA co-exist in West Bengal?

The government is examining whether two separate Acts on the subject of regulation of the real estate sector — one enacted by the Centre and the other by a state — can coexist.  The ministry of housing and urban affairs announced on Twitter on Thursday that it is examining whether both Acts can co-exist.

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RERA was fully notified in 2017 and states were given powers to notify their respective rules and appoint regulatory authorities. While this is applicable across the country, except in J&K, the West Bengal government is the only one that has come out with its separate legislation, HIRA.

The government had earlier constituted a sub-committee in the Central Advisory Council meeting with the objective of persuading the Bengal government to adopt RERA, besides oversee the implementation in other states. However, this sub-committee has not been notified till now.

Having central and state Acts on the same subject is under examination. A sub-committee under these circumstances will serve no purpose. Full compliance of transformational legislation like RERA will bring positive changes in the sector which will be good for all stakeholders,” tweeted the ministry of housing and urban affairs.

Both RERA and West Bengal’s HIRA differ on the definition of force majeure clause and garage. Under RERA, force majeure clause can be invoked only in case of war, draught, floods, earthquake, fire or any other natural calamity affecting the regular development of real estate projects.

However, according to HIRA, over and above the conditions listed under RERA, force majeure clause can be declared for any other circumstance prescribed.

RERA has defined garage as a place within a project that has a roof and walls on three sides for parking any vehicle, but it does not include unenclosed or uncovered parking area. HIRA, on the other hand, says a parking slot means such an area as may be prescribed, and garage as sanctioned by the competent authority.

Experts have raised concern over the dilution of the Act and are of the view that states need to follow RERA in letter and spirit. According to them, states may decide to follow the model adopted by Bengal if it goes through, and may result in making RERA redundant.

Most states have initiated the process of setting up the regulator and authorities from Maharashtra, Punjab, Madhya Pradesh, Haryana and Gujarat have already started passing the orders. Kerala and Telangana have notified their state rules under RERA, but are yet to set up an authority.