The government must recognise the importance of real estate in India. It contributes heavily to the GDP growth. It is also one of the biggest creators of employment in the country. I would say the government must take up reforms more aggressively.
There are lots of issues that need to be addressed. Currently, the sector is flooded with unauthorised players. Almost 60% of the total development in the country is unauthorised . This needs to be solved. But you can’t just demolish all those buildings in a day. Also, in the current economic scenario, there is a problem of over-supply of residential and commercial units, which will go on for the next two years.
Ever since Independence, the government focused on a narrow growth pattern. It adopted a socialist approach to optimise usage. It adopted a ‘think small policy’ to manage shortage. At that point in time, it was the right decision. But after economic liberalisation was introduced in 1991, reforms should have been given importance. In today’s scenario, the government needs to think big and create surplus. Also, another area where the government may have gone wrong is urban development, where it completely eliminated private participation initially. Perhaps the government didn’t realise that it was not possible for a public agency to spearhead development . It was at that time that a lot of unauthorised players sprang into action.
Awards would not make a significant dent, but it would definitely give some importance to the housing and construction industry in India. But an actual change will happen if the finance minister makes a statement in the annual Budget, underlining the importance of the real estate sector. Do you think a regulator is required for the sector? There cannot be a central regulatory body controlling the entire housing and construction industry in the country. Real estate is linked to states and each state should ensure good regulation. Take Haryana, for instance . It is a state that has developed well and has adhered to stringent regulation. Other states should follow its model.