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In India, the real estate sector has always played a crucial role in the economy. It not only contributes greatly to the GDP, but also employs a major section of the society. Moreover, with various other industries linked to real estate, the realty sector creates a multiplier effect. Therefore, a slowdown in the real estate sector would result in a slowdown in the economy as a whole while the growth of the industry would also prove beneficial for the economy. Keeping this in mind, the government has been trying to assist the real estate sector in various ways to help it flourish.
In recent times, however, the efforts by the government to help the real estate sector revive have intensified. It might be noted that the last few years witnessed stagnancy in the real estate market as property sales declined, funding became harder to obtain and unsold units continued to increase. At such a time, the government came up with a multitude of measures to help the real estate sector grow.
One of the main initiatives taken by the government was the introduction of the Special Window for Affordable and Mid-income Housing. Under this program, the government funded the projects stalled at the last stage of construction due to credit crunch. Evidently, this move was widely welcomed by the developers unable to liquidate their properties due to the stalling.
The funding window allowed the developers to finish their projects quicker and regain the cash flows. On the other hand, it also saved the homebuyers from the problems of delayed delivery of properties. The overall market sentiment improved as a result of the initiative, as the developers gained the trust of the buyers through timely delivery.
One of the key reasons behind the decline in real estate investments in India was the shady activities of many developers. In numerous cases, they were known to not divert the funds of one project to another. This would stall the project that a homebuyer had invested in, greatly delaying the competition. Other problems included various hidden charges by the developers. However, this issue has been effectively tackled with the establishment of RERA.
The Real Estate Regulatory Authority enforced transparency into the realty sector. So far, the RERA has proven its competence in solving disputes between developers and buyers, protecting the interests of both. Properties registered with the RERA are much safer to invest in, as the buyers can approach RERA in case of irregularities by the builder. Together, all these measures by the government are leading the real estate sector down a path of healthy revival.
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