Anushruti Singh
The upcoming Budget is expected to emphasise maintaining economic stability and fostering growth, especially in light of the uninspiring GDP numbers from the past two quarters. Stimulus measures for SMEs, MSMEs, job creation, and skilling initiatives are anticipated to further propel economic activity. Having said that, tax relief, incentives, consumption revival, and finally, industry status, this is what the real estate sector is vying from the union budget 2025. With the upcoming Union Budget around the corner, the industry is abuzz with expectations. Could this year finally bring the much-desired recognition?
Saurabh Runwal, Director, Runwal Realty, states, “With the sector’s current valuation of over $477 billion and its trajectory towards a $1 trillion market by 2030, it’s crucial that the budget addresses both immediate challenges and long-term opportunities,”
Here are the top wishlist from the real estate stakeholders.
Industry status, a long pending demand
Achieving industry status would give the real estate sector with major benefits. It would make it easier to obtain institutional loans on more favourable terms, providing a consistent flow of funds for developers and other stakeholders. Currently, the market is primarily reliant on non-banking financial corporations (NBFCs) and private equity funds, which often have higher costs.
Speaking on this issue, Runwal says, “Granting real estate industry status is vital. It will not only reduce land acquisition costs but also make financing more accessible, leading to more affordable housing. With land comprising up to 70-80 per cent of costs in major metros, these reforms will directly impact the affordability and scalability of residential projects,”
Additionally, industry status would allow the sector to be more formally recognised by policymakers, enabling specific policy measures tailored to its unique challenges, including housing shortages, regulatory bottlenecks, and infrastructure development hurdles.
Measures to revive affordable housing
Once a promising sector, affordable housing—homes priced under INR 40 lakh—has struggled post-pandemic, with demand and supply shrinking significantly. According to ANAROCK data, the sales share of affordable housing fell to a mere 18 per cent in 2024 from over 38 per cent in 2019. Similarly, its share of total housing supply in the top seven cities dropped to 16 per cent in 2024 from nearly 40 per cent in 2019.
According to Anuj Puri, Chairman, ANAROCK Group this decline highlights the urgent need for intervention. “Affordable housing requires focused attention and targeted benefits, which have been lacking in the past two years. Tax breaks to boost supply and enable buyers are crucial, but the challenges go deeper. A critical issue remains the lack of urban land, particularly in areas where affordable housing is most needed,”
To address this, he suggests government to release centrally controlled land—managed by agencies like the Indian Railways, Port Trusts, and the Department of Heavy Industries—for affordable housing projects.
He further suggested reintroducing the credit linked subsidy scheme under PMAY, which expired in 2022 to incentivise first-time buyers.
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Revise affordable housing criteria
Puri also called govt to revise affordable housing criteria.
“Current definitions of affordable housing, based on size, price, and buyer income, require urgent revision. While the size criterion (60 sq. m. carpet area) is reasonable, the price cap of INR 45 lakh is unrealistic in high-cost cities like Mumbai. The cap should be raised to at least INR 85 lakh in Mumbai and INR 60-65 lakh in other metro cities to reflect market realities. Such revisions would enable more properties to qualify as affordable housing, granting buyers access to lower GST rates (1 per cent without ITC) and other subsidies,” he explains.
Restore tax holiday for developers
The tax holiday under Section 80-IBA of the Finance Act, 2016, was a major incentive that boosted affordable housing supply. According to the stakeholders, reintroducing this benefit could be transformative, offering substantial tax breaks to developers focused on affordable housing projects.
Navin Makhija, Managing Director at The Wadhwa Group points out, “This provision will incentivise developers to launch more affordable housing projects, aligning with the government’s vision of ‘Housing for All.’ The benefit will also ensure increased supply in this category, meeting the ever-growing demand for budget-friendly homes,”
Rajeev Sikka, Real Estate Investor and Consultant, Property Point also agrees, “Such a policy impetus would motivate budget housing construction in reaction to the increased demand for affordable housing and result in more convenient housing for government goals,”
GST relaxations
The real estate sector currently contributes approximately 7.3 per cent to India’s GDP and projected to reach 13 per cent by 2025. Given this, the sector is anticipating GST reforms.
Tejas Patil, Founder, Arbour Investments expects 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 per cent to 18 per cent would lower construction costs, thereby promoting growth in the housing sector,” he says.
Measures for tier-2 real estate
The real estate players are also hoping for transformative measures, particularly for the burgeoning Tier 2 cities of India, as these cities are witnessing an influx of homebuyers.
Manoj Dhanotiya, Founder and CEO of Micro Mitti, emphasises the critical role these cities play in India’s economic future. “The heartbeat of India’s growth is shifting—from the skyscrapers of metros to the ambition-filled streets of Tier 2 cities,” he states.
Dhanotiya advocates for reduced stamp duties and increased home loan deductions to make homeownership more accessible. Simplified GST norms and capital gains tax relief on real estate investments, he believes, could attract a wave of new investors.
“Cities like Indore, Ahmedabad, Lucknow, Surat, and Bhubaneswar aren’t waiting for change; they are leading it. Dedicated funds for IT parks, fintech hubs, and smart residential developments will make these cities economic powerhouses, keeping talent and businesses rooted in their hometowns. With the right policies, Tier 2 India will drive the nation’s next economic boom,” he says.
Uplift luxury homes
Last year’s budget laid a good foundation with its focus on affordable housing and infrastructure, but now real estate players expect more impactful reforms, especially with the rising luxury housing market.
As luxury homes are seeing a demand surge, Rahul Thomas, Whole-Time Director of Suraj Estate Developers comments, “If the budget includes a stronger push for sustainable, green construction and urban development, it could open doors to new opportunities while addressing environmental concerns. This budget has the potential to move beyond incremental changes and truly redefine the future of India’s real estate sector, making it more dynamic, inclusive, and future-ready. However, the specific details will depend on the government’s priorities and the overall economic situations,” he says.
Skilled workforce and streamline approval systems
In addition to financial measures, the sector urgently requires a workforce that is equipped to deliver on the aspirations of modern India.
Runwal of Runwal Realty says, “Upskilling is paramount, particularly in technology integration and quality control, to ensure that the burgeoning demand for smart, sustainable cities is met with precision. The implementation of modern urban governance frameworks, including streamlining approvals and improving land use policies, will be instrumental in speeding up project timelines and ensuring that urban spaces are well-planned and equipped to support the population growth expected in the coming years,”
With the government’s ongoing focus on urbanisation, housing, and sustainability, the real estate sector remains optimistic about initiatives that could further boost the sector. Key areas of interest for people include tax benefits for homebuyers, increased incentives for affordable housing and green building initiatives, and enhanced ease of doing business for developers. Overall, real estate is expecting a forward-thinking and inclusive budget to catalyse long-term growth in the sector and contribute to broader economic progress.
Summarising the views, Shashank Paranjape- MD, Paranjape Schemes Construction Ltd concludes with his point of view, “From our perspective, as we plan to launch several new projects in 2025, it is critical to assess how government policies might influence market sentiment, pricing structures, and customer buying potential,”
On the other hand, 2025 Union Budget presents a golden opportunity for the government to acknowledge the real estate sector’s critical role in shaping India’s economic future. Granting industry status could indeed be the dream come true that the sector has long awaited.
