Property in India Faces Challenges Arising From Rapid Progress

Rapid economic progress has had a significant impact on property in India over the past twenty-five years. In the past all countries that have liberalized their market, allowed FDI inflows, and started trading intensely with the outside world have experienced a rapid rise in the standard of living of it’s citizens. A rising standard of living has led to the creation of new real estate that is more expensive than was real estate in these countries at any other time in the past. Real estate in India is no exception, properties in India that could be bought for 1 lakh rupees thirty years ago, will not be sold for less than 2 crore’s today.

During all this rapid progress that has led to a higher standard of living for millions in India, the side effect of rapid economic growth is being overlooked and is being brushed under the rug. Future challenges that India faces are as follow.

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Urban Migration Leading to Chaos

Nearly five hundred million or 50 crore Indians it is estimated will live in urban centers in India within 8 years and nearly 6 crore will live in urban slums by this time unless action is taken to provide slum dwellers with suitable urban housing.

The number of Indians expected to live in urban slums may even be greater than the 6 crore mentioned if the government does not begin to tackle this problem sooner rather than later. Slum dwellers must own their own property in India and become a part of the formal economy.

Poverty

Nearly one third of the worlds poor, or 40 crore people, live in India. The number of poor in India may actually have risen in several Indian states over the past few years. Additionally, many of those who have escaped poverty over the past few decades are in danger of once again falling into poverty. Owning realestate in India is only a distant dream for many of the poorest of the country.

Widening Inequality

Despite the large number of Audi and BMW cars on Indian roads, there is a wide financial gulf separating India’s rich from the poorest in the country. The Per Capita GDP in India is a little more than $1,400 and is among the lowest in the world. The difference in the per capita income also varies widely between different states; it is $294 in Bihar and $436 in Uttar Pradesh, far below the national average. The wide gulf between per capital incomes in different regions leads one to infer that the poor of region may be regarded to be rich in another region and these same rich individuals of one region may be able to buy property in India at a poorer region.

Rural Backwardness

While many Indian cities have glass towers and glitzy shopping malls, rural regions of the country are still decades behind the lifestyle enjoyed by the urban elite. One third of rural Indians don’t have access to an all weather road and three hundred million do not have any electricity. The ports, airports, and railway’s are considered to be highly inadequate to fully serve the countries needs. Infrastructure across many parts of India is reminiscent of the British era and much of the real estate in India suffers from a lack of a proper support from civic services.