UPA’s fall & rise of Modi Sarkar!
Before Modi Government took charge of India Inc., UPA’s first term (UPA-I, 2004-09) saw strong Indian economy on the back of a global economic revival. But with the global financial crisis in 2008 India’s shining growth started looking pale. From close to 9% y-o-y in the first term of the UPA government, average annual GDP growth slipped to below 7% y-o-y during its second term (2009-14). Riding high on overall negative sentiments and Mr. Modi’s convincing personality, BJP with its allies ensured a sweeping victory in 2014 general election.
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The Indian Real Estate industry was about to witness a myriad of changes on that day!!
After taking charge as India’s 15th Prime Minister on May 26th, 2014, Modi Government did not waste much time before getting into action mode. In Initial years some major initiatives really set the mood buoyant in Indian Real Estate scenario.
Housing for All by 2022: A robust step forward towards sustainable urban living, Modi Govt. has proposed to build houses for Economically Weaker Section (EWS) & Lower Income Group (LIG). The project promises to build 110 million individual units by 2022. With many private sector enterprises joining hands, ‘Housing for All’ project is already creating unprecedented demands for affordable housing and that leaving broad grins on the faces of Real Estate developers.
Smart Cities: Modi Govt. proposed to build 100 smart cities in India. The ambitious project will have integrated townships, better infrastructure & better utilities. The smart cities will also take in Special Economic Zones (SEZ) to encourage investment & facilitate employment opportunities.
REITS: Through Real Estate Investment Trust (REIT), more investments in real estate and infrastructure segments are expected. Government has been taking policy initiatives to expedite the process of implementation of REITs in the Indian market.
RERA: Objective of this bill is to protect the interest of property buyers and bring in a system of integrity and commitments. The act provides suitable platform to seek justice for everyone who is affected.
Digitization: In Modi’s Digital India Real Estate sector is fast gaining transparency quotient and credibility. This is an important attraction for foreign investors.
The big jolt
Many things Indian changed on 8th November, 2016! When Demonetisation happened, Indian Real Estate industry was one industry expected to take the hardest blows and understandably so. The secondary real estate sector was affected majorly, as it has traditionally seen high involvements of cash transactions however projects by reputed and credible Developers especially in metros & tier I cities remained insulated to a good extent.
The revival & the ‘Big Budget’
Union Government is in talks with the state Governments asking them to reduce stamp duty on registration of affordable houses which has undoubtedly given a solid boost to the affordable housing segment. In another important turn of event it was announced that land parcels of railway will be set to be used for the development of hotels, multi-level parking lots and malls under Public Private Partnership (PPP) mode which will boost local employment. Union Shipping & Ports Minister Nitin Gadkari is up for ambitious projects including MbPT’s land development project valued at of Rs 5,000 crore.
The initiatives are certain to uplift the otherwise pensive mood of the industry leaders.
Major positive announcements were made in Union Budget 2017 as well. Affordable Housing was given Infrastructure status, a total of Rs 3, 96,135 crore was allotted for the infrastructure sector, changes in capital gains tax for housing was announced. Most importantly, Personal Income Tax on citizens with income falling under Rs 2.5 lakh to Rs 5 lakh to reduce to 5% from 10% now. Rebate of Rs 3,500 for income holders up to Rs 3.5 lakh was announced. This brought more liquidity and improved purchase power of common men.
Mr. Modi led Bharatiya Janata Party’s stunning victories in recently held state assembly elections indicated a promising political future of our Prime Minister if things go as planned for him.
Looking at the number of initiatives and modifications executed over past years, it’s clear that Mr. Modi is definitely working towards the image transformation of Indian Real Estate industry from being an unorganized and allegedly dodgy industry to one which is far more transparent, organized and upright.
Policies adopted by Mr. Modi have already helped the industry; prices have stabilized to a great extent, digitization is being welcomed by the developers and there is an increased focus on better governance, etc. Also, a few of these major announcements have excited domestic markets and also garnering interests from across the globe.
For a common man who may have been postponing his home buying decision for price which was skyrocketing at an alarming rate in last decade or so and other factors such as lack of trust, would definitely change his position or at least adjust it in a positive direction.
Authored by 9amstories.com Editorial