As Budget deadline nears, realty sector hardens pitch for industry status

Visakhapatnam: With the deadline for presentation of Union Budget 2026 nearing, real estate developers have renewed their demand for industry status for the sector, stating that it could ease access to institutional finance, lower borrowing costs, and improve project execution.

Developers feel that the sector, despite being a major employment generator after agriculture and fisheries and supporting allied industries such as cement, steel, and construction services, continues to face hurdles in accessing formal credit on a par with other infrastructure-linked segments.

“Industry status will help developers raise funding more efficiently and complete projects on time. It will also improve transparency and credibility in the sector,” said E Ashok Kumar, President, Credai Visakhapatnam Chapter.

Kumar noted that a significant share of real estate funding still comes through high-cost private sources, structured finance, or informal borrowing, increasing the cost of capital and affecting delivery timelines. He said industry status would enable more consistent treatment within the banking and institutional lending system, improving access to working capital and long-term loans at competitive rates.

He added that even compliant mid-sized and regional builders often find it difficult to secure financing smoothly.

“The biggest issue is the mismatch between project timelines and the cost of money. If borrowing becomes cheaper, delivery efficiency will improve,” he said.

Developers also argued that industry status could accelerate professionalisation, as regulated institutional funding typically brings stricter scrutiny, stronger governance norms, and more transparent reporting. With homebuyers increasingly favouring developers with strong delivery records, they believe formal recognition would aid organised development, especially in tier-2 markets where demand is rising but financing remains uneven.

“Industry status improves accountability. Institutional lenders insist on stronger due diligence, better documentation, and tighter monitoring, which improves market professionalism,” Kumar said.

The demand comes amid improved end-user sentiment and steady interest in larger, organised housing projects. Developers maintained that on-time completion remains the key factor shaping buyer trust and said lower funding costs could reduce delays, limit cost overruns, and strengthen market credibility.