Indian infrastructure and Real Estate industry is playing the key role in the nation’s progress towards achieving the status of “developed nation” from “developing nation”. However, there is a consensus that infrastructure inadequacies would constitute a significant constraint in realising our growth potential.
An ambitious program of infrastructure investment has therefore been evolved for strengthening and consolidating recent infrastructure and real estate related initiatives. To supplement the estimates of Gross Capital Formation in infrastructure, the Planning Commission has made projections of public-private investments in each sector, basing these on a detailed review of sectoral trends and projected expenditures. Prospective investments of Rs. 11,886 billion are estimated in infrastructure projects (underway and proposed) and expected to grow at CAGR of 14% over 2007-11.
The Indian real estate sector plays a significant role in the country's economy, which is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). Almost five per cent of the country's GDP is contributed to by the housing sector. In the next five years, this contribution to the GDP is expected to rise to 6 per cent.
Almost 80% of real estate developed in India is residential space, the rest comprising of offices, shopping malls, hotels and hospitals. According to the Eleventh Five-Year-Plan (2007-12), there is a shortage of 26.53 million dwelling units. Thus, over the next 10 to 15 years, 80 to 90 million housing dwelling units will have to be constructed with a majority of them catering to middle- and lower-income groups.
Foreign Direct Investment (FDI) into India in the real estate sector for the fiscal year 2009-10 has been US $ 2.84 billion and in construction sector (including roads and highways) has been US $ 2.87 billion approximately.
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