The absence of industry status forces a significant portion of developers to rely on high-cost private capital, structured finance, or informal borrowing. This reliance inadvertently inflates the cost of capital, which in turn stretches project delivery timelines, says E. Ashok Kumar, president of the Confederation of Real Estate Developers’ Associations of India (CREDAI) Visakhapatnam chapter. (Representative image )
| Photo Credit: Representative image
The real estate fraternity has once again renewed its long-standing demand for ‘industry status,’ ahead of the Union Budget 2026 (likely to be tabled on February 1).
Developers contend that such a formal recognition is pivotal to ease access to institutional finance, rationalise borrowing costs, and ensure timely execution of housing projects.
Industry stakeholders argue that despite being a primary engine of employment generation and a cornerstone for allied sectors such as cement, steel, and construction services, real estate continues to grapple with systemic hurdles in accessing formal credit. Currently, the sector does not enjoy the same parity as other infrastructure-linked segments such as cement and steel when it comes to lending norms.
Speaking to The Hindu on Thursday (January 22) E. Ashok Kumar, president of the Confederation of Real Estate Developers’ Associations of India (CREDAI) Visakhapatnam chapter, noted that the absence of industry status forces a significant portion of developers to rely on high-cost private capital, structured finance, or informal borrowing. This reliance inadvertently inflates the cost of capital, which in turn stretches project delivery timelines.
“Industry status will facilitate more efficient fund-raising and enable developers to adhere to completion schedules. It will also bolster transparency and credibility across the board,” Mr. Kumar said.
He further emphasised that formal recognition would ensure consistent treatment within the banking and institutional lending ecosystems, providing a steady stream of working capital and long-term loans at competitive interest rates.
The challenges are particularly acute for mid-sized and regional builders who, despite being compliant, often find the credit pipeline constrained.
“The fundamental issue is the mismatch between project gestation periods and the cost of money. If borrowing is incentivised, delivery efficiency will see a marked improvement,” Mr. Kumar added.
Beyond financial liquidity, developers argue that industry status would act as a catalyst for professionalisation. Regulated institutional funding typically necessitates more rigorous scrutiny, robust governance frameworks, and transparent reporting.
As homebuyers increasingly gravitate towards developers with proven delivery track records, formal recognition is expected to foster organised development. This is seen as especially crucial for tier-2 markets, where demand is surging but financing remains fragmented and uneven.
“Industry status improves accountability. Institutional lenders insist on stringent due diligence, comprehensive documentation, and tighter monitoring, all of which enhance market professionalism,” Mr. Kumar observed.
The renewed pitch comes at a time when end-user sentiment remains buoyant, with a steady preference for larger, organised housing projects. Developers maintain that on-time delivery remains the single most critical factor in sustaining buyer trust. By reducing funding costs, the sector aims to mitigate delays, curb cost overruns, and reinforce its overall market credibility.
Published – January 22, 2026 08:32 pm IST
