Real Estate Sector Urges Revisions in Affordable Housing and Liquidity Measures
The real estate sector in India is pushing for significant changes in the upcoming Union Budget, aimed at addressing the current market challenges. Key demands include revising the definition of affordable housing, easing liquidity for both buyers and developers, and granting the sector industry status. These measures are seen as crucial to revitalize the market, which has been under pressure due to rising property prices and other economic uncertainties.
Pradeep Aggarwal, Founder & Chairman of Signature Global (India), emphasizes the need for the extension and reintroduction of the Credit-Linked Subsidy Scheme (CLSS). According to Aggarwal, this scheme could provide significant relief to first-time homebuyers and stimulate demand across various housing segments. Expanding the definition of affordable housing to include homes priced up to Rs 1 crore would better align with current market realities and support the government's 'Housing for All' vision.
The real estate sector currently contributes around 7% to India’s GDP and supports over 200 allied industries. Granting industry status would improve access to institutional funding, reduce borrowing costs, and enhance transparency. This would enable the sector to play a stronger role in job creation and economic growth, as stated by Aggarwal.
Avneesh Sood, Director of Eros Group, points out that over the past few years, land prices, material costs, labor expenses, and compliance requirements have all increased. Policies need to reflect these changes. Revisiting the affordable housing definition can help restart supply in urban and fringe markets where projects are no longer viable under the old price limits. Clarity on REIT and InvIT taxation is also crucial to attract long-term capital into commercial real estate and infrastructure assets.
Affordable housing in India generally refers to homes within reach of low-to-middle-income groups, defined by government schemes like the Pradhan Mantri Awas Yojana (PMAY). These schemes set income levels, carpet area limits, and price caps (around Rs 45 lakh for metros and non-metros, varying by location). The Union Budget 2026-27, likely to be presented in parliament on February 1, comes at a time when housing sales have seen a sharp decline. Data from real estate consultant firm ANAROCK Research indicates that housing sales in India’s top 7 cities witnessed a 14% decline in 2025, with 3,95,625 units sold compared to 4,59,645 units in 2024.
Dhaval Ajmera, Director of Corporate Affairs at Ajmera Group, highlights the sector's expectation for waiving off the cap currently placed on home loans and introducing tax benefits on the interest paid by buyers, irrespective of the ticket size. This move would significantly boost the economy and the Indian real estate ecosystem. Ajmera also calls for a rationalization of GST on residential projects and a redefinition of affordable housing from price-oriented to measurability, which would be a crucial step in formalizing the 'Housing for All' dream of the honorable Prime Minister.
Overall, the real estate sector is looking forward to a budget that addresses these critical issues, providing a much-needed boost to the market and helping to achieve the government's ambitious housing goals.
