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The real estate sector in India has assumed growing importance with the liberalisation of the economy. The consequent increase in business opportunities and migration of the labour force has, in turn, increased the demand for commercial and housing space, especially rental housing. Developments in the real estate sector are being influenced by the developments in the retail, hospitality and entertainment (e.g., hotels, resorts, cinema theatres) industries, economic services (e.g., hospitals, schools) and information technology (IT)-enabled services (like call centres. Further, current data on the sectors such as ownership of dwellings, real estate services, About 250 ancillary industries such as cement, steel, brick, timber, building materials etc. are dependent on. he real estate industry


The rentals of the industrial/trading establishments are deductible expenses from the profits of these establishments but appear as profits of the business or company renting out the premises. Similarly, implicit rents on self-owned real estate is accrued as profits from business and is difficult to separate from non-real estate profits. The addition to the stock of real assets with these businesses appears in the business accounts as capital addition. In the national accounts it would appear under the head ‘gross fixed capital formation – construction’. Value of construction output is the additions made to the stock of real estate assets in the public, private and household sectors. The contribution of ‘construction’ to GDP is the estimate of value added derived from the corresponding


Conversion of rural land at market prices should be completely de-controlled and left to the market. At present, in Delhi, historical village land situated within the city limits cannot be converted to develop urban colonies. The presence of ‘urbanised villages’ in the middle of the capital city is an anachronism and a testament to bad policy. The curbs on the expansion of urban limits into surrounding village areas should be removed. Restrictive legislations and lack of transparency in transactions are other main impediments to the growth of this sector. Limited investment from


Real estate mutual funds, pension funds and insurance companies are the major investors in the housing sector in developed countries. In the United States, pension funds invest 5 per cent of their reserves in real estate equity and mortgages, whereas in India developers’ ability to get financial help from these sources is limited. Housing finance companies in India also need to be given access to pension, provident and insurance funds. As the gestation period of real estate projects is more than five years, on an average, it is necessary that developers have access to