The real estate industry in India has been witnessing a major boom in recent years. With the country’s growing population, urbanization, and increasing demand for housing, the real estate sector has become one of the most promising and lucrative industries in India. In this article, we will discuss the factors that have contributed to the growth of the real estate business in India and its impact on the economy.
Government Initiatives
One of the major factors that have contributed to the growth of the real estate business in India is the government’s initiatives. The Indian government has introduced various policies and schemes that have helped in the growth of the sector. One of the significant initiatives by the government is the ‘Housing for All’ scheme, which aims to provide affordable housing to every citizen in the country. Under this scheme, the government has allocated a significant amount of funds for the construction of affordable housing units across the country.
Another initiative is the ‘Pradhan Mantri Awas Yojana,’ which focuses on the construction of affordable housing units for the urban poor. The government has also introduced the Real Estate Regulation and Development Act (RERA) to regulate the real estate sector and protect the rights of homebuyers. These initiatives have boosted investor confidence in the real estate sector, leading to an increase in investments in the sector.
Rapid Urbanization
India is witnessing rapid urbanization, and the demand for housing in urban areas has been increasing. The urban population in India is expected to reach 600 million by 2031, which will further drive the demand for housing. As more people migrate to cities for better job opportunities and a better lifestyle, the demand for housing will continue to grow.
The growth of the IT industry has also contributed to the increase in demand for housing in cities such as Bangalore, Hyderabad, and Pune. The demand for housing is not only limited to residential properties but also includes commercial properties such as office spaces and retail spaces.
Infrastructure Development
The Indian government has been investing heavily in infrastructure development in recent years. The development of new highways, airports, and metro rail projects has led to the growth of the real estate sector in the surrounding areas. Infrastructure development has also led to an increase in demand for commercial spaces such as office spaces, retail spaces, and warehouses.
The development of the Delhi-Mumbai Industrial Corridor (DMIC) is one of the significant infrastructure projects in India. The project aims to develop industrial zones along the 1,483-kilometer-long corridor connecting Delhi and Mumbai. The DMIC project is expected to attract significant investments in the manufacturing and logistics sectors, which will further drive the demand for commercial spaces in the surrounding areas.
Foreign Investments
Foreign investments in the Indian real estate sector have been increasing in recent years. The Indian government has relaxed Foreign Direct Investment (FDI) norms, making it easier for foreign investors to invest in the sector. The government has also introduced Real Estate Investment Trusts (REITs), which allow investors to invest in the Indian real estate sector through a listed entity.
Foreign investors are attracted to the Indian real estate sector due to the country’s growing economy, increasing urbanization, and favorable government policies. The inflow of foreign investments has led to the development of high-end residential and commercial properties in the country.
Impact on the Economy
The growth of the real estate sector has had a significant impact on the Indian economy. The sector has contributed significantly to the country’s GDP, providing employment opportunities to millions of people. According to a report by the National Skill Development Corporation, the real estate sector is expected to generate over 75 million jobs by 2022.
The growth of the real estate sector has also contributed to the growth of other sectors such as cement, steel, and construction. The sector’s growth has led to an increase in demand for raw materials