According to Tejas Patil, Founder, Arbour Investments, as we approach the Union Budget 2025, the real estate sector, currently contributing approximately 7.3% to India’s GDP and projected to reach 13% by 2025, anticipates reforms to address persistent challenges and unlock its full potential. This sector is also a significant employment generator, supporting over 50 million jobs, underscoring the need for focused policy attention.
A critical expectation is the granting of ‘Industry’ status to real estate, which can streamline access to institutional finance, potentially reducing borrowing costs and enhancing transparency. Furthermore, increasing the tax exemption limit for housing loans from ₹2 lakh to ₹3 lakh could spur demand for residential properties, making homeownership more affordable for the middle-income segment.
Amendments to GST regulations, such as allowing input tax credit on under-construction properties, can reduce costs for developers and end-users. Additionally, reducing the GST rate on cement from the current 28% to 18% would lower construction costs, thereby promoting growth in the housing sector.
Infrastructure development should remain a priority, with increased budgetary allocations for urban renewal projects and connectivity initiatives. The previous year’s capital expenditure saw a significant increase, and a similar push this year could accelerate growth, particularly in tier 2 and 3 cities.
Lastly, fostering private investments through Alternative Investment Funds (AIFs) and offering tax incentives to institutional investors will ensure liquidity and enable ambitious projects.
We hope the upcoming budget takes these transformative steps, empowering real estate to remain a cornerstone of India’s growth story.
