Modi Government 3.0
The National Democratic Alliance (NDA) has secured a historic victory in the recent Lok Sabha elections, ensuring Prime Minister Narendra Modi Government third consecutive term. This continuity in governance comes with a plethora of promises and expectations to bring a new wave of growth and stability to India’s Economy and Real Estate Sector. Here’s how Modi Government 3.0 is set to be a game-changer for Real Estate and the broader economic landscape.
Robust Infrastructure Growth
One of the hallmarks of the Modi administration has been its relentless focus on infrastructure development. Over the past decade, substantial investments have been made in roads, highways, ports, and airports.
Experts estimate that the Indian real estate market will be worth Rs 65,000 crore by 2040. Industry leaders emphasize the need for sustained government support to achieve this growth. The expansion of India’s retail, hospitality, and commercial real estate sectors is also noteworthy, as they offer crucial infrastructure to cater to the country’s burgeoning needs. Policy changes and tax rationalization are advocated by experts to streamline processes and stimulate further growth.
Record-breaking sales and Future Prospects
In FY23, India’s residential property market reached an all-time high, with home sales amounting to Rs 3.47 lakh crore (US$ 42 billion), marking a 48 percent year-on-year increase. The volume of sales also saw robust growth, with a 36 percent rise to 379,095 units sold. Despite this impressive performance, industry leaders highlight the necessity for continued governmental impetus to sustain and amplify this growth, particularly through reforms in the Goods and Services Tax (GST).
Union Budget 2023-24 Commitments
In the Union Budget 2023-24, the Finance Ministry committed Rs 79,000 crore (USD 9.64 billion) to the PM Awas Yojana, a 66 percent increase from the previous year. This substantial allocation underscores the government’s commitment to addressing the housing needs of the urban poor and supporting the real estate sector.
Investment Opportunities
The Securities and Exchange Board of India (SEBI) has recently approved the Real Estate Investment Trust (REIT) platform, which will enable all types of investors to participate in the Indian real estate market. This initiative is expected to create investment opportunities worth Rs 1.25 trillion (USD 19.65 billion) in the coming years, providing a significant boost to the sector.
Pradhan Mantri Awas Yojana (PMAY)
The Pradhan Mantri Awas Yojana (PMAY) has been a cornerstone of the Modi government’s efforts to provide affordable housing to all.
Since its inception, PMAY has sanctioned over 112 lakh (11.2 million) houses, with more than 50 lakh (5 million) houses already completed. The scheme offers subsidies and incentives for first-time homebuyers, making homeownership accessible to a larger segment of the population.
Modi 3.0 aims to further accelerate this mission, ensuring every Indian has access to affordable housing by 2022. Continued support and enhancements to PMAY will bolster the real estate sector, particularly in affordable housing.
Urbanization and Economic Strength
India’s urban population has been growing steadily, and urbanization is a key driver of economic growth. The Modi government’s policies have played a crucial role in managing this urban expansion effectively.
Over the past decade, the urban population has increased by approximately 34%, with major cities like Delhi, Mumbai, and Bengaluru experiencing rapid growth. Continued focus on urbanization will drive demand for residential and commercial real estate, particularly in these burgeoning smart cities.
Demand of Luxury Properties
India’s luxury real estate market has seen consistent growth, driven by increasing wealth and a growing preference for high-end living. All the major cities have witnessed a surge in demand for luxury properties, with buyers seeking premium amenities and strategic locations.
The government’s push for infrastructural development and urbanization has further fueled this demand, making luxury real estate a lucrative investment. Modi 3.0’s continued focus on economic growth and urban development is expected to sustain and enhance the demand for luxury properties. As more global investors and expatriates show interest in India’s luxury real estate, this segment is poised for continued expansion.
Smart Cities Mission and Urban Planning:
The Smart Cities initiative has transformed urban areas into modern, sustainable cities with improved infrastructure, better services, and enhanced quality of life.
To date, 100 cities have been selected, with projects ranging from smart transportation systems to efficient waste management and renewable energy integration.
Boost in India’s GDP:
India’s GDP has grown from $2 trillion in 2014 to over $3 trillion in 2023, reflecting robust economic management. Foreign Direct Investment (FDI) inflows have also seen a significant increase, with India attracting $81.72 billion in 2020-21 alone.
The introduction of the Goods and Services Tax (GST) simplified the tax system and increased compliance. The Insolvency and Bankruptcy Code (IBC) has improved the resolution process for distressed assets, benefiting the banking sector and overall economic health.
Conclusion
The Modi government 3.0 continuous support and strategic initiatives are set to transform India’s real estate landscape. With a focus on robust infrastructure development, effective urbanization, strong economic policies, and initiatives like the Pradhan Mantri Awas Yojana, the stage is set for significant advancements. The emphasis on luxury properties further complements this growth, ensuring that India’s real estate market caters to diverse demands and continues to thrive. As we look ahead, Modi Government 3.0 is poised to build on past successes, driving India’s economic and real estate growth to new heights.
