Naredco-KPMG paper: Real estate & construction sector to generate 75 mn jobs by 2022

The real estate and construction sector in the country is expected to be the third largest globally by 2030, contributing over 15 per cent to GDP and emerging as the largest employer in India providing employment opportunities to over 75 million people.

A background paper by KPMG in India and the National Real Estate Development Council (Naredco) provides an overview of the programmes launched by the Central Government in the recent past to address the key challenges in urbanisation and the real estate sector, and throws light on the policy reforms undertaken by Government to address these concerns.

The paper highlights that India’s urban population is forecast to increase by about 40 per cent from 420 million in 2015 to over 580 million by 2030. The Government has launched several large programmes (such as Smart Cities, Housing for All, AMRUT, HRIDAY etc.) along with policy support (Real Estate Act, REITs, GST etc.) to accommodate such a vast population base. According to the paper, nearly 110 million houses would be required by 2022 alone in urban as well as rural India to provide housing to all citizens. This includes the current shortage of over 60 million houses, out of which around 20 million exist in urban areas.

As per the paper, there are a number of solid infrastructure projects in the pipeline. These include 432 projects worth Rs6.5 trillion for roads, more than 400 projects worth Rs6 trillion in railways, 70 projects worth Rs670 billion for the development of airports and 75 projects worth Rs551 billion for the ports.

Neeraj Bansal, Partner and Head, Building, Construction and Real Estate Sector – KPMG in India, said, “The recent policy reforms such as the Real Estate Act, GST, REITs, steps to reduce approval delays etc. are only going to strengthen the real estate and construction sector. The sector players now more than ever need to develop a global mindset towards quality, project delivery, work culture and governance. Strong steps are required to provide faster approvals, serviceable and clear title of land, long term finance and skilled workforce.”

According to Rajeev Talwar, Chairman, Naredco, “We are excited about the next ‘Decade belonging to India’ – as real estate is going to be a catalyst and major economic driver in the process. The Government has paved the way with introduction of GST, Real Estate Act; relaxation in investment norms for REITs, direct and indirect tax incentives on housing development. The convention is an opportunity for us as an Industry to deliberate about the challenges that we are likely to face in coming years. We now take upon ourselves to implement strategies for fulfilling his vision.”