Government of India has intervention initiatives to encourage the development and growth in real estate sector. Smart Cities Mission, Pradhan Mantri Awas Yojana, RERA, FDI, REITs etc.
Smart Cities Mission, 2015
Pradhan Mantri Awas Yojana, 2015
Special Economic Zones (SEZ) Policy, 2001
FDI in Construction, 2005
Real Estate Investments Trust (REITs), 2014
Real Estate (Regulation and Development ) Act, 2016
Goods & Services Tax (GST), 2017
Special Window for Affordable and Mid Income Housing Investment Fund (SWAMIH), 2019
National Logistics Policy (NLP), 2022
Benami Transactions Act, 2016
Various Schemes of the Government of India beneficial for Real Estate Industry.
The Smart Cities Mission (SCM) is a significant initiative by the Government of India launched on June 25, 2015.
The aim of this policy is to transform urban areas into sustainable and citizen-friendly spaces.
Funding & Progress:
Current Status (2025):
100 cities selected
7,900+ projects launched
Significant urban infrastructure improvements underway
Launched: June 25, 2015
Agenda of this policy is providing 1.12 crore houses for urban poor across the country over the 7 seven years (between 2015 and 2022).
Key Features:
Indian SEZ policy was introduced in 2000 and formalized with the Special Economic Zones Act in 2005.
The aim of this policy was to provide a stable fiscal regime and quality infrastructure for SEZs.
Tax Incentives:
100% dispensation on income tax for 5 years on export income, 50% for the next 5 years, and 50% for another 5 years on reinvested export profits.
Positive Effects:
Capital Appreciation and Rental Yields:
The Growth in Property values in SEZs is 10-12% annually.
High rental yields, typically 8-10%, exceeding the national average.
Under this 100% FDI is allowed in construction development under the automatic route (no prior government approval needed).
The main objective is to boost foreign investments to meet the demand of rising housing & infrastructure in India.
Reserve Bank of India (RBI) has issued notification to allow 100% FDI.
Minimum Capitalization: For single owned subsidiaries like housing plots, the minimum capitalization is US$10 million, and for joint ventures like construction projects with Indian partners, it is US$5 million.
Attracted foreign capital, driving GDP growth & employment.
Encouraged urban expansion & housing supply.
Strengthened India’s position as an investment hub.
REITs in India are structured as trusts under the Indian Trust Act, 1882.
Introduced by SEBI to raise investments in the real estate market.
REIT facilitates investors to invest in income generating real estate assets.
REIT has only influenced the office and retail segment of the sector.
REIT has infused liquidity in the market, helping developers to utilize as capital and expand the development of the sector with new launches.
They primarily invest in completed, income-generating real estate assets. Investors can buy units in a REIT and receive dividends from rental incomes generated by these properties.
REITs is anticipated to have a cascading impact in the growth of the real estate sector. It provides developers streamlined exit mechanism, which in turn allows for the reinvestment of capital into fresh projects.
Passed by Lok Sabha - March 15, 2016.
Came into Effect - May 1, 2016 (Initially, first 61 sections notified).
Remaining sections notified & fully implemented - May 1, 2017
Objective: Promote and regularize transparency & accountability in the growing real estate sector.
Enacted: To protect buyers' interests, trust and ensure fair practices.
Real Estate Regulatory Authority (RERA): Every state must establish a RERA body to regulate real estate projects.
Appellate Tribunal: Handles appeals in each state against RERA decisions.
Mandatory Registration is required for projects exceeding 500 sq. meters or more than 8 apartments.
Developers must provide layout plans, timelines, and project details on RERA’s website for disclosure.