The share of housing sector to the overall GDP (gross domestic product) is likely to rise by 1% to 6% on increased investment.
"Currently, about 5% of India's GDP is contributed by the housing sector. With institutional credit for housing investment growing at a CAGR of about 18-20% per annum in next three-five years, the housing sector's contribution to GDP is likely to increase to 6%," the Economic Survey said today.
Highlighting the importance of housing sector, the survey said for every rupee that is invested in housing and construction, Rs 0.78 gets added to the GDP.
"Investment in housing and real estate activities can be considered a barometer of growth of the entire economy," it observed.
The report, however, pointed out that India ranks 181st in construction permission processes as per a World Bank' Doing Business 2012 report, while it is among the top nations in terms of housing and work space needs.
"There are 34 procedures and the average time taken is 227 days," it said.
Citing examples of Municipal Corporations of Delhi and Indore, which have introduced online sanction for building plans and issuing completion certificates, the survey said other development authorities should also take similar measures.
The report listed out some of the challenges being faced by the realty sector such as hardening of interest rates, land acquisition, high stamp duty, costs related to registration and mutation, the Urban Land Ceiling Regulations Act (ULCRA) and the existing lower floor area ratio in cities, and absence of single window clearance.