Policy Priorities For India’s Real Estate Sector: Strengthening Housing, Capital Access, And Urban Development - Kamlesh Thakur

India’s real estate sector is at a pivotal inflection point. As our nation urbanises at an unprecedented pace, the real estate framework underpins the fundamental engine of economic growth, productivity, and job creation. However, to meet the aspirations of a rapidly expanding urban population and support the vision of Viksit Bharat, our policy and regulatory architecture must proactively evolve to address affordability, rental housing, access to institutional finance, and rising project development costs.

Ahead of our upcoming Real Estate & Infrastructure Investors’ Summit 2026 (REIIS 2026), where global and domestic stakeholders will convene under the theme 'RE-Defining India's Growth Story', it is essential to outline the critical policy priorities necessary to strengthen housing supply and build a resilient real estate ecosystem.

1. Prioritising a Robust Rental Housing Policy

Centre and state governments must give far greater policy attention to rental housing, particularly in major urban centres where residential property prices have increased substantially over the past four to five years. With homeownership becoming increasingly challenging for large sections of the lower- and middle-income population, a well-defined rental policy framework supported by targeted fiscal incentives can bridge the affordability gap. This will encourage quality rental supply at scale while offering housing security and mobility to urban workers.

2. Expanding Residential Applications of the REIT Framework

While India’s listed Real Estate Investment Trusts (REITs) have successfully institutionalised investment in income-generating real estate, there is significant scope to encourage greater adoption of REIT structures for eligible residential and rental assets. Further policy and regulatory measures to facilitate the development and scalability of residential-focused REIT structures could help unlock pools of long-term institutional capital, deepen the organised rental housing market, and provide developers with an additional sustainable funding avenue.

3. Strengthening Domestic Capital for Atmanirbhar Bharat

To achieve true economic self-reliance, India must build a stronger financial ecosystem for domestic developers and institutions. Policy and fiscal measures that incentivise Indian financial institutions to participate more actively in property financing will deepen the domestic funding pool. Reducing reliance on external capital ensures stable, long-term capital flows, driving localised growth and employment.

4. Revisiting Bank Finance for Land and Statutory Costs

It is time for the Reserve Bank of India (RBI) to revisit the framework governing bank finance for real estate. Currently, developers must commit extensive upfront equity toward land acquisition, statutory premiums, development charges, and approval costs before construction begins. Allowing regulated banks to finance a calibrated portion of these legitimate pre-construction expenses under strict regulatory safeguards and valuation norms will significantly reduce capital costs, accelerate execution, and improve overall housing affordability.

5. Rationalising GST and Simplifying Redevelopment

Taxation reforms remain crucial for enhancing efficiency. Allowing Input Tax Credit (ITC) on real estate projects will eliminate the cascading effect of taxes embedded in housing costs. Furthermore, a simplified, uniform GST framework is urgently needed for redevelopment projects, especially in dense urban centres like the Mumbai Metropolitan Region (MMR). Providing tax clarity regarding development rights and multi-party society agreements will minimise litigation, improve project viability, and accelerate urban renewal.

The Path Ahead

A coordinated approach between the Centre, state governments, the RBI, and industry bodies can unlock the next phase of sustainable growth. At REIIS 2026, NAREDCO Maharashtra will bring these policy dialogue points to the forefront, bringing together global capital and policy leaders to channel over ₹10,000 crore in foreign investments and drive 100+ new project launches across Maharashtra. Aligning institutional capital with progressive policy reforms will ensure Indian real estate remains the cornerstone of our $10 trillion economic journey.

About the Author: Mr. Kamlesh Thakur is the President of NAREDCO Maharashtra. A prominent real estate leader, his work focuses on urban development, housing sector policies, and driving growth in the real estate industry.

Disclaimer: The views expressed are for general informational purposes only and should not be construed as legal, financial, investment, or regulatory advice, or as an offer or solicitation to invest. Readers should seek independent professional advice before making any investment or business decisions.

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