It has also sought better taxation norms for Real Estate Investment Trusts (REITs) that have been introduced to generate funds for the commercial real estate in a transparent manner.
"To recover high land costs, developers have neglected affordable housing and instead focused on mid-and high-end segments, where the margins are higher. This has led to a lack of affordable housing options in Indian cities," C&W said in a statement.
Greater tax breaks such as service tax exemption for developers of affordable projects would incentivise developers and spur the private sector's interest in the space, leading to creation of affordable housing stock, it added.
"A home buyer is entitled to claim both the interest and principal components of home loan repayments for tax benefits. However, the ceiling under tax benefits is currently capped at Rs 2,00,000 towards the total interest payable on the home loan and Rs 1,50,000 for principal paid.
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"However, the principal paid is clubbed under Section 80C with other tax saving instruments which effectively does not provide significant tax relief to the home buyer," it said.
"Deductions towards the total interest payable on the home loan should also be increased from Rs 2,00,000 to Rs 3,00,000. Such changes will help in attracting home buyers," C&W said.
The consultant also demanded "industry status" for the real estate sector.
"Awarding 'industry status' to real estate sector in India will improve funding to the beleaguered developers and will also call for lower interest rates on loans. Moreover, granting industry status will also simplify approval process and increase transparency," it said.