He also asked the sector to submit their taxation related suggestions to the recently appointed panel on tax issues and said the government would seriously look into the final recommendations of the committee.
Speaking at a housing market conference here attended by real estate players and housing finance firms, Jaitley said the sector will be the next big mover as far as the Indian economy was concerned.
"The real estate should survive on market economy (and) subsidies should not be essence of survival for the industry," Jaitley said.
He said that inflation has been brought under control and Reserve Bank has already cut rates four times this year, which was a positive move for the sector and "hopefully those moves are here to stay".
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On macro issues, the finance minster said the global environment has not been helpful and the impact was visible in exports slowing down in India.
"We are unquestionably one of the fastest, if not the fastest growing major economies... On revenue collection, the indications look more on the optimistic side," Jaitley said.
The minister further said that the savings from low global commodity prices were being used in irrigation and infrastructure while improving the health of power sector was also one of the most important tasks.
"After roads and highways, very soon we will be looking into the issues of the power sector," Jaitley said.