Real estate India has a multiplier effect on income and employment. As indicated by a HUDCO-IIM Ahmedabad study, every rupee invested in this sector adds 78 paisa to the state's GDE. For one direct job created in the housing industry, eight jobs are created indirectly as Indian real estate sector as a spillover.

The main money-spinner is the housing market in India. Global consultancy firm, Merrill Lynch has estimated that the sector will grow from $12 billion in 2005 to $90 billion by 2015. Attributing the sloppiness in the Indian real estate sector that keeps it from realizing its real potential, a McKinsey study has come out with the finding that removing land market barriers can actually contribute an additional one per cent to India's GDP growth rate.

Though real estate in India has most of the things going for it, the average home ownership age has certainly come down drastically, India's realty sector is plagued by unorganized and fly-by-night players. Corporates and large players do not have a national presence.

These barriers impose exorbitant cost. World Bank study estimates that an average housing project in India takes up to six years to complete as against 15-18 months in China. India also charges one of the highest levels of stamp duty in the world.

In most states, it is in the range of 10 to 15 per cent, though Delhi has recently brought it down to a low 6 percent. To circumvent high stamp duties, unregistered - and all cash-property transactions and transfers through Power of Attorney are rampant, bringing significant financial loss to the exchequer.

The Urban Land (Ceiling & Regulation) Act, 1976 which hampers availability of land for housing projects, still remains in force in states like Andhra Pradesh, Assam, Bihar, Maharashtra, Jharkhand and West Bengal. A land title monitoring system is also functional but often leads to cases where the party gets duped. Ownership is established only by the sequence of earlier transfers.

All India Bar Association estimates that about 40 percent of all litigations filed in lower courts and state high courts are related to land ownership or property related disputes in India. Municipal property tax collection is languishing as it is based on the rent.

Seeking protection under the Rent Control Act, many tenants still pay the same rent that they used to pay decades ago. Landlords do not like to invest money in repairs. The proposed National Housing and Urban Habitat Policy 2006 envisages that by 2021 every homeless Indian would have a house of his own.

Many analysts are of the view that apart from comprehensive legal reforms, the sector also needs to be recognised as an infrastructural industry, which attracts lower taxes and gets low cost funds. To cover the predicted shortage of 24.71 million houses by the end of 2007, in the next10 to 15 years, 80 to 90 million houses will have to be constructed in India.

Office space requirement in India may become threefold to at least 60 to 80 million square feet by 2010. 600 new shopping malls are expected to be in place by 2010. The Indian realty sector is expected to be worth $90 billion by 2015 m. It is expected to receive $7 to $10 billion FDI in real estate sector.

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