The Indian government is mulling over the possibility of revising the classification limit for “affordable homes” to Rs 75 lakh, according to Dinesh Kapila, an economic advisor at the Ministry of Housing and Urban Affairs. The current definition sets affordable housing units at prices up to Rs 45 lakh, which Kapila believes is unrealistic, particularly in cities with soaring land costs. He revealed that a proposal has been forwarded to the Union finance ministry to reconsider the threshold for affordable housing.
Speaking at the 12th Real Estate Conference and Excellence Awards program in Delhi, Kapila highlighted the challenges posed by high land prices, especially in metropolitan cities like Delhi and Mumbai. He stressed the need to adapt the definition to the economic realities of the real estate market. “We have requested the finance ministry to consider raising this threshold to at least Rs 75 lakh,” he stated.
Kapila also emphasized the role of the real estate sector in India’s urbanization and economic growth. He projected the Indian real estate sector’s size to reach approximately $1 trillion by 2030, contributing around 13 percent to the country’s GDP by 2026.
He further discussed the critical role played by the Real Estate (Regulation and Development) Act, 2016 (RERA) in regulating the real estate sector. Since its implementation, nearly 86 percent of real estate projects across the country have been successfully delivered, marking significant progress in the industry.
Dakshita Das, former managing director and CEO of the National Housing Bank, highlighted the growing demand for affordable homes due to rapid urbanization. As rural populations migrate to urban areas, there is a pressing need to focus on and bolster the affordable housing sector.
Ravi Aggarwal, co-founder and managing director of Signature Global, emphasized the real estate sector’s potential for growth and its role as the second-largest employer in the country, employing around 5.5 crore people nationwide.
The proposed revision in the definition of affordable housing aims to make homeownership more attainable for a broader range of individuals, ultimately contributing to the expansion of the real estate sector in India.