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The contribution of the real estate sector to India's GDP has been estimated at 6.3% in 2013, and the segment is expected to generate 7.6 million jobs in the same period, according to a report.
"The Indian real estate and construction industry is an integral part of the economy and plays an important role in the development of the country's infrastructure base and is one of the largest generators of economic activity," the report by global property consultant CBRE said.
The report, 'Assessing the Economic Impact of India's Real Estate Sector, was released by Minister of Housing and Urban Poverty Alleviation Girija Vyas at the inaugural session of Natcon 2013 in Moscow, the flagship real estate event of Confederation of Real Estate Developers' Associations of India (CREDAI).
India's real estate sector is estimated to have a total supply pipeline of close to 3.6 billion sqft lined up for completion in the year 2013, with about 98% of this being concentrated in the residential segment, the report said.
"The potential for development and growth in the real estate sector is tremendous. It is expected to generate over 17 million employment opportunities across the country by 2025, thereby making a significant contribution to the GDP," CBRE South Asia Pvt Ltd Chairman & MD Anshuman Magazine said.
The total economic footprint generated by construction of this real estate pipeline will require a total investment of about Rs 254,000 crore, it said, adding that it will help generate revenues worth Rs 370,000 crore and provide jobs to about 7.6 million people across the country in 2013.
"The total contribution of the real estate sector to the national GDP has been estimated to be about 6.3% in 2013 alone," it added.
Commenting on the report, Lalit Jain, Chairman, CREDAI and CMD of Kumar Urban Development Ltd said: "The report portrays the conservative status of the sector's contribution. For the first time a detailed attempt has been made to give facts on its importance in terms of GDP , industrial production employment opportunities."
The sector faces numerous challenges, such as high borrowing costs, lack of institutional funding, lengthy approval processes and slow and uneven infrastructure development, the report said.
The CBRE report lists a set of recommendations which could assist the sector in achieving its full potential in the long term. These include measures such as addressing supply constraints, streamlining the approval processes, permitting new sources of real estate funding and promoting private sector participation in the construction sector.
