The RBI and the Government now must recognise the contribution of the Indian real estate sector to the economy. As an industry it provides substantial employment, capital generation and enables economic activities such as manufacturing, trading, services, etc. Hence, ensuring that the sector is provided with the similar benefits as provided to other infrastructure sectors such as roads, dams, airports, etc. will prove very beneficial to the Indian economy at large. The authorities must at least consider the case for such proactive measures to be taken to protect and boost the housing sector where their own assessments show that there is a current shortfall of 18.78 million units in urban India.”

Real estate construction is labour and capital intensive and the real estate and construction business is the second largest employer in the nation after agriculture. Significantly, real estate also forms the basic input for a variety of other sectors such as IT/ITeS, retail and trading, manufacturing, etc. and has a substantial multiplier effect on others sectors of the economy. Therefore, any decline in construction may lead to adverse impacts on the Indian economy such as increased unemployment rates, reduced business investments, reduced off-takes on primary sectors such as mining and steel production, etc. Thus, the Indian real estate needs to be provided with requisite Government and institutional support to ensure its long term and sustainable growth in a manner that is beneficial to all segments of society and it should be pronounced at par with other sectors such as electricity, water, roads and highways within the scope of ‘infrastructure’ sector.

The Indian real estate sector at present is facing challenges like increased land cost, delay in approvals, lack of availability of funds both at buyers’ and developers’ levels, under-developed infrastructure and skilled manpower. It has been a pressing demand from all the stakeholders in the real estate sector for the sector to be given the status of ‘infrastructure.’ Whilst it is the RBI’s prerogative to grant this status, it is also up to the Government to recommend and push for this. The reasons and benefits of this demand are explained hereafter.