How Real Estate Will Fuel India's Economy With real estate's significant contributions to India's GDP, it is imperative to delve into the overall impact of the industry, exploring how it has become a linchpin of economic progress
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As India marches forward on its path to becoming a global powerhouse, one sector stands tall as the vital engine of growth and employment: the real estate industry. Second only to the agriculture sector, the dynamic sector holds the mantle as the second-highest employment generator in the country while contributing about 11% to Gross Value Added (GVA) growth since 2011-12 . Further, beyond the bricks and mortar, the real estate sector is expected to touch a US$ 1 trillion market size by 2030. This will account for 18-20% of India's GDP — acting as a catalyst that propels the nation's economy to new heights.
During this year's, National Investiture Ceremony of Confederation of Real Estate Developers Associations of India , the Union Minister of Commerce and Industry, Piyush Goyal, acknowledged the role of real estate in India's growth story, highlighting its contribution as a largescale employment provider. With real estate's significant contributions to India's GDP, it is imperative to delve into the overall impact of the industry, exploring how it has become a linchpin of economic progress.
Real Estate Industry's Reach Extends To More Than 270 Allied Industries That Rely On Its Sustenance For Their Own Growth And Prosperity
FUELING ECONOMIC GROWTH AND EMPLOYMENT:
With its immense labor requirements and extensive value chain, real estate plays a pivotal role in empowering a large workforce and driving economic growth. The sector's demand for a diverse array of skills and expertise spans across construction, architecture, engineering, project management, sales, marketing, and property management, among others. According to conservative estimates, nearly 70 million Indians are employed in the real estate sector as of 2022 , which is most likely to grow owing to industrialization and digital advancements. Job prospects such as real estate agents, consultancy firms, business development, sales and marketing among others will gain traction.
THE INFRASTRUCTURE IMPERATIVE:
Budget 2023 focused significantly on infrastructure growth with nearly INR 10 lakh crore direct investment, in the sector. Real estate developers play a pivotal role in the construction of critical infrastructure, such as public transportation networks, power plants, data centers, and above all urban development. By collaborating with public entities and urban planners, they contribute their expertise to develop sustainable solutions that address the evolving needs of growing populations.
Furthermore, real estate is a key driver in the development of residential and commercial spaces that form the backbone of cities.
SUPPORTING THE SUPPLY CHAIN ECOSYSTEM:
The real estate industry's impact is not limited to the direct employment it generates. Its reach extends to more than 270 allied industries that rely on its sustenance for their own growth and prosperity. Key supplier industries, including steel, cement, timber, and construction materials, thrive due to the demand generated by real estate development.
FDI EXPANDING HORIZONS: The government's liberalized policies and regulatory reforms such as unchanged repo rate at 4%, low home loan interest rates, Affordable Housing Fund (AHF)have created a conducive environment for international investors to explore opportunities in the Indian real estate market.
THE ROAD AHEAD:
With projections indicating the trillion mark by 2030, this sector is set to become an even more significant contributor to the nation's economy. To unlock its full potential, the industry must leverage technological advancements, embrace sustainable practices, and adapt to changing market dynamics. By embracing innovation and addressing the evolving needs of consumers, the real estate industry can navigate future challenges while harnessing the immense opportunities that lie ahead.