Can the Government’s Real Estate Relief Measures Work?

Posted in Housing Articles By Sajhyadri Chattopadhyay-
view icon 1.04 K Views like icon 0

The Indian real estate market is passing over rugged terrain, trying to adapt to the seismic shifts spurred by the COVID-19 pandemic, recent technological advancements, and a looming recession cloud. Amidst these challenges, real estate remains a dynamic, ever-evolving, and fiercely competitive market, rife with hurdles for both buyers and sellers. Let’s explore the array of obstacles that real estate stakeholders are battling and how the government is stepping in to even out these odds. 

Government Initiatives Infusing a New Hope for Real Estate

The Indian government has taken several significant steps to aid and boost the real estate sector, aligning with the vision of ‘Housing for All’. 

  • Real Estate (Regulation and Development) Act, 2016 (RERA)

RERA was enacted to bring order to the real estate sector. It safeguards the interests of property buyers and encourages developers to deliver timely and professional services. The act mandates the registration of projects with plot sizes over eight apartments or 500 sq. mt. Regulatory authorities are tasked with addressing buyer grievances, with appellate tribunals available for unresolved disputes. 

  • Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund: 

In 2019, the government introduced the SWAMIH Investment Fund to provide priority debt financing for completing stalled affordable and middle-income housing projects. It is sponsored by the Ministry of Finance and managed by SBICAP Ventures Ltd. So far, SWAMIH has granted final approval to around 130 projects, sanctioning over ₹12,000 Crores. 

  • The Smart City Project: 

The Smart City Project, launched in 2015, aims to create 100 smart cities. These cities offer innovative solutions to prioritise core infrastructure, sustainability, and a high quality of life for residents. This endeavour offers lucrative opportunities for real estate companies, aligning with the goal of sustainable urbanization in India. 

Also Read: Top Reasons Behind the Slump in the Real Estate Industry

Other Major Initiatives: 

The Atmanirbhar Bharat 3.0 package provided income tax relief measures for real estate developers and homebuyers on purchasing primary residential units worth up to ₹2 Crores. 

The Government started an Affordable Housing Fund (AHF) with an initial corpus of ₹10,000 Crores supports micro-financing for Housing Finance Companies (HFCs). 

The Affordable Rental Housing Complexes (AHRCs) scheme, approved in 2020 under the Pradhan Mantri Awas Yojana – Urban, aids urban migrants and the underprivileged. 

Possible Government Reform Measures for the Sector

To further strengthen the real estate sector, the government could consider these courses of actions –

  • Industry Status for Real Estate Sector

Granting the real estate sector an official industry status would unlock numerous benefits via an inclusion in State and Central industrial policies. This move could attract domestic and foreign investments, aiding project completion and benefiting consumers.

  • Streamlined Property Title Issuance

To enhance transparency, the Centre should ensure a seamless process for transferring land records, regularizing zoning, and determining FSI for acquired land. This would expedite bureaucratic procedures and help buyers secure property title easily.

  • Strengthening State-Level Mechanisms

Currently, most real estate development project clearances are decentralised to the respective state governments where the project is commissioned. Establishing a single-window clearance system at the state level would streamline various approvals, promoting ease of business and cost management. 

  • Government Fund for Lower Lending Costs: 

Creating a government fund to reduce lending costs for developers would boost project financing and alleviate the burden of high financing costs. Such a government fund would aid developers stuck with projects for dearth of capital and improve housing supply for countless Indian consumers. 

Understanding the Need for Relief Measures

In this evolving landscape, it's crucial to recognise the hurdles confronting the real estate sector to understand what relief measures are needed – 

  • Rising Costs of Construction Materials: 

The cost of construction materials forms a substantial chunk of the expenses incurred by real estate developers. Recent surges in the prices of essential items like cement and steel, driven by a global shortage of raw materials, have aggravated these costs. 

  • Dependence on Manual Labour: 

Traditionally, the real estate industry has heavily relied on labour-intensive construction methods. However, a recent shortage of workers has created bottlenecks across construction projects. Currently, there is an industry-wide labour shortfall of around 15-25%, leading to project delays and cost overruns.

  • Challenges in Securing Funding: 

Construction projects are capital-intensive and require substantial funding, especially for small-scale developers. Unfortunately, securing loans from financial institutions has often proved challenging, with speculations over cash flows, and other potential problems leading to a protracted loan approval process. 

  • Pandemic and the Work-from-Home Trend: 

The COVID-19 pandemic reshaped work dynamics, with many companies adopting a work-from-home system to maintain social distancing. This led to reduced demand for property in major urban cities and badly impacted the rental market. Even now, some companies continue to embrace remote or hybrid work patterns. 

  • Land Scarcity and High Property Rates: 

Acquiring land for new projects is a significant challenge due to limited availability and government ownership of sizable land parcels. As high property rates further compound the issue, it continues to be challenging for small developers to get their hands on the capital needed for land investments. 


As a homebuyer or an investor, it's essential to base your property purchasing decisions on your own financial goals over external market fluctuations. Navigate its evolving landscape wisely and utilise the plethora of funding options available to realise your realty goals. Today, you can apply for a Home Loan of up to ₹15 Crores at interest from 8.45% p.a., only on Bajaj Markets. Carefully assess your financial situation and benefit from flexible repayment tenures of up to 40 years now! 

Loan Offer
Download App