The Economic Survey has projected a positive outlook for the real estate sector with housing demand set to rise on rapid urbanisation, but described legacy stalled projects as a “challenge”.

“Real estate and ownership of dwellings have accounted for over seven per cent of the overall GVA (gross value added) in the past decade, highlighting their integral role in the economy,” the survey said, which was tabled in the Parliament by Union Finance Minister Nirmala Sitharaman.

Economic Survey 2023-24: India’s growth back to pre-COVID trends, 7%-plus growth possible in medium term 

“The outlook for the real estate sector is encouraging. With increasing urbanisation, the housing industry is poised for a significant transformation,” the survey document said.

Stating that half of India’s population is projected to dwell in urban regions by 2050 compared to 31% in 2011, the survey stressed the need to adapt strategies and policies to meet the rising demand for housing and offer viable, cost-effective and sustainable solutions.

Also Read: Economic Survey 2023-24 full document

The survey also pointed out that “the legacy stalled real estate projects is a challenge.” Approximately 4.1 lakh stressed dwelling units, involving ₹4.1 lakh crore, are affected as estimated by the Indian Banks’ Association (IBA).

The Ministry of Housing and Urban Affairs established a committee to recommend solutions for completing stalled projects to address this issue. The committee identified the primary cause of stress as lack of financial viability, resulting in cost overruns and delays, and has suggested various recommendations.

Economic Survey 2023-24 LIVE updates

The document mentioned that the real estate sector has witnessed a “robust recovery” after two challenging years of pandemic-induced lockdowns and economic instability.

The survey noted that the COVID pandemic has shifted homebuyers’ preferences toward larger, sustainable spaces with additional amenities, driven by remote and hybrid working trends.

“Factors contributing to the sector’s growth include rapid urbanisation, rising income levels, the emergence of nuclear families, new entrants in the market, and improved financial options for developers and homebuyers,” it said, adding that the strong desire for home ownership was reinforced during the pandemic.

Quoting housing brokerage firm PropTiger data, the survey highlighted that residential real estate sales in the 2023 calendar year were at their highest since 2013, witnessing a 33% annual growth, with a total sale of 4.1 lakh units in the top eight cities. The new supply witnessed an all-time high, with 5.2 lakh units launched in 2023 against 4.3 lakh units a year ago.

Read the full Economic Survey

The momentum continued in January-March of 2024, witnessing record-breaking sales of 1.2 lakh units, clocking a robust 41 per cent Year-on-Year (YoY) growth.

Further, the rising demand for housing loans reflects the underlying demand for real estate. Housing loans as a percentage of GDP increased from FY12 to FY24.

Traditionally, banks have been the most significant players in the housing finance sector.

However, Housing Finance Companies (HFCs) have significantly contributed to this landscape over the years. They played a complementary role with banks in providing housing credit to the bottom of the pyramid. The share of outstanding housing loans as a percentage of total loans of HFCs stood at 70.8 per cent as of March 31, 2024.

The Survey listed various factors that have led to the growth in the housing sector, including the Pradhan Mantri Awas Yojana-Urban (PMAY-U), launched in 2015, has sanctioned over 1.2 crore houses for urban beneficiaries, ensuring durable housing.

Policy reforms like the Goods and Services Tax, Real Estate (Regulation and Development) Act, and the Insolvency and Bankruptcy Code have boosted transparency and investor confidence in real estate.

Initiatives like the Affordable Housing Fund and Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund have supported affordable housing projects. PMAY(U)-Credit Linked Subsidy Scheme interest subvention has been a primary demand-side driver. The National Housing Bank (NHB) has released ₹49,460.1 crore in subsidies benefiting over 21.1 lakh households by March 2024.

The Survey believes that the digitisation of land records is poised to improve transparency in land transactions, diminish property ownership conflicts, and enhance the efficiency of land management.

Implementing a single-window clearance system for construction approvals will also accelerate construction processes, minimising delays and uncertainties, it said.

“Going forward, the demand for housing is expected to be driven by affordability and increased access to credit,” it added.

As of March 2024, the shares of Southern, Western and Northern states in the individual housing loans outstanding are 35.4%, 31.2% and 26.2%, respectively.

“The Eastern States at 6.9% and the eight North-eastern and Hilly states combining to 0.95% share present an opportunity for undertaking initiatives for improving penetration,” the survey said.

Stating that sustainability and technology have emerged as significant disrupters for the real estate sector, the document said that sustainability would influence green construction practices and energy-efficient designs while technology will revolutionise smart homes and data-driven insights.

With more significant environmental concerns, the focus will be on energy-efficient systems, rainwater harvesting and smart building technologies, it said.

The Lok Sabha witnessed heated exchanges between the treasury benches and the opposition during the Motion of Thanks to the President’s address. The claims, counterclaims, and interjections all point towards a confrontational atmosphere in the 18th Lok Sabha, perhaps shaped by changes in its composition.

From 2019 to 2024, the National Democratic Alliance (NDA) and friendly parties held a significant lead of around 300 MPs over the INDIA bloc and opposition. However, this session saw the margin narrowing to just 60 MPs. The verbal sparring between Prime Minister Narendra Modi and Leader of the Opposition Rahul Gandhi turned acrimonious and personal, reflecting the recently concluded election campaign dynamics and entrenched positions.

Both Congress And BJP Remain Steadfast

While the Congress aims to sustain momentum, the Bharatiya Janata Party (BJP) remains resolute not to concede further ground. The shift in strength, allocation of time for parties, and the calibre of speakers on both sides will significantly influence proceedings over the next five years. During the recent Motion of Thanks debate, Rahul Gandhi, as Leader of the Opposition, spoke for nearly an hour and 40 minutes out of the allotted 16 hours – roughly 15% of the total time allotted to the opposition.

Time allocations are based on Lok Sabha strength. During the No Confidence Motion of August 2023, the BJP received around 45% of the time, while the Congress’ share was just 18% With the BJP’s friendly parties (the Biju Janata Dal, the YSR Congress Party, the Bahujan Samaj Party) losing ground in recent elections, their allocation has shifted notably to opposition parties.

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Some prominent speakers from the treasury benches, such as Smriti Irani, were notably absent. Conversely, the presence of parties like the Samajwadi Party (SP) has bolstered the opposition, particularly with effective speakers in fluent Hindi. Akhilesh Yadav’s speech, noted for its sarcasm without overt anger, followed Rahul’s assertive tone.

Rahul’s Performance As LoP

During Monday’s session, Rahul Gandhi launched a scathing attack on the Modi government, highlighting issues including inflation, unemployment, NEET, Minimum Support Price (MSP) for crops, the Agniveer scheme, and Hindutva, aiming to put the government on the defensive. Top ministers, including the Prime Minister, intervened during Rahul’s speech.

While Rahul addressed critical issues, some noted the absence of specific data and figures in his speech. There is already an ongoing debate over Rahul’s performance in his role as Leader of the Opposition, with supporters arguing his assertiveness marks a significant political presence that cannot be ignored.

Not new to controversy, Rahul made a reference to the BJP and the Rashtriya Swayamsevak Sangh (RSS), stating, that those who called themselves Hindu only talked about violence, hatred, and untruth. PM Modi rebutted instantly.

Also Read | “Every MP’s Right”: Rahul Gandhi Questions Expunging Of Parts Of Speech

References in Rahul’s speech to to Hinduism and violence, two prominent industrialists, the Agnipath scheme, and NEET, were expunged. The LoP subsequently wrote to the Speaker questioning the decision and demanding the restoration of his remarks in parliamentary records.

Modi’s Address

On Tuesday, PM Modi delivered the concluding remarks on the Motion of Thanks in the Lok Sabha. His speech, lasting around 2.5 hours, was a scathing attack on the Congress and Rahul. Throughout his address, the opposition shouted slogans, prompting Modi to use headphones to counter the noise. Despite the interruptions, Modi’s speech, though not entirely audible, gave enough hints of the things to come in the next five years.

Modi criticised the opposition’s maturity level, noting that while the treasury benches listened to Rahul’s speech with interjections rather than shouting slogans, the opposition did not afford the same respect to the Prime Minister. Expressing displeasure at the sloganeering, Modi referred to Rahul as “balak buddhi” (childish) and mocked how a party celebrating 99 out of 543 seats was acting as if it had won 99 out of 100. He criticised the Congress party’s promise of transferring Rs. 1 lakh to women’s bank accounts, highlighting the public’s scepticism about similar promises made earlier.

Modi accused Rahul of resorting to drama to garner sympathy, pointing out his bail status in alleged financial misconduct.

Overall, the debate was disappointing for both the opposition and the ruling party. BJP leaders neglected discussion around their agenda for the next five years, while the opposition failed to engage in constructive criticism and effectively address issues like NEET. Both sides instead resorted to mudslinging, seemingly forgetting that the elections were over.

The session’s outcome suggests the potential for more disruptions and chaos in Parliament. Both sides must reconcile with the electoral mandate and strive for a fresh start in the upcoming Budget session.

(Amitabh Tiwari is a political strategist and commentator. In his earlier avatar, he was a corporate and investment banker.)

Disclaimer: These are the personal opinions of the author

New Delhi:
After Rahul Gandhi’s fiery speech in Parliament yesterday, in which he launched a scathing attack on BJP – large portions of which have been expunged from official records – the stage is set for Prime Minister Narendra Modi’s anticipated response

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