Cities will be responsible for more than 70% of the country’s GDP by 2030, says Housing Minister, Hardeep Singh Puri

2023-08-25 09:18:35

Cities will be responsible for more than 70% of the country’s GDP by 2030, Hardeep Singh Puri, Minister of Housing and Urban Affairs and Minister of Petroleum and Natural Gas said at a real estate event by Confederation of Real Estate Developers’ Associations of India (CREDAI).

Puri said that India is rapidly urbanising and by 2030, it is estimated that more than 600 million people will reside in its cities.

“At the same time, cities are also major contributors to climate change. The United Nations Environment Programme (UNEP) estimates that cities emit up to 75% of the global CO2-equivalent emissions globally. Buildings and urban transport are amongst the largest contributors,” Puri said at the event.

A recent study by the World Economic Forum states that buildings and building construction related activities account for 40% of global greenhouse gas emissions, in addition to deforestation and depletion of raw materials.

The most important raw material, cement, is responsible for about a quarter of all industry CO2 emissions.

McKinsey estimates that decarbonising the built environment can create as much as $800 billion to $1.9 trillion in new green value pools across sectors.“There is a dire need to innovate from conventional construction approaches. Considering that India is witnessing a relative construction boom amidst slowdown in the sector in China and other large nations, India can realise a significant portion of these potential value pools,” Puri said. In 2010, a study had estimated that India needed to add about 700-900 sq. metres of commercial and residential space every year to meet its urbanisation demands for 2030.

PMAY-U has emerged as one of the largest affordable housing schemes in the world by sanctioning more than 1.18 crore houses, of which 1.13 crore houses have already been grounded and more than 76 lakh houses delivered to beneficiaries.

About 43.3 lakh houses under the mission are being constructed using sustainable building materials such as fly ash bricks/blocks and AAC blocks. These houses will contribute to a reduction of 9 million tonnes of CO2 emissions by the end of December 2024.

In 2021, a study by The Energy and Resources Institute (TERI) stated that the GHG emissions mitigation potential from all PMAY-U houses was estimated to be 12 million tonnes of CO2 equivalent.

The Ministry of Housing and Urban Affairs shortlisted 54 innovative construction technologies from all over the world under the Global Housing Technology Challenge (GHTC).

Further, six light house projects were selected in Chennai, Rajkot, Indore, Lucknow, Ranchi and Agartala under which 6,368 houses are being built.

“There are more first-time home buyers, especially under the Credit Linked Subsidy Scheme (CLSS). With demand set to remain high, the real estate sector has a vital role to play,” said Puri.

The real estate sector influences approximately 53% (8% directly and 45% indirectly) of India’s economy, through strong forward and backward linkages with core sectors such as steel and cement. An estimated 270 allied industries and 37 crore people benefit either directly and indirectly from the real estate sector.

“We need to get the mammoth task of adding more housing accomplished at a pretty quick rate while also ensuring its sustainability and climate resilience. This requires high construction quality standards and the adoption of new and emerging building materials. The six light house projects are a pilot exercise, aimed to initiate a sweeping change in the approaches adopted by the Indian construction industry,” Puri said.

Manoj Joshi, Secretary, Ministry of Housing and Urban Affairs said that there is a need to take these technologies to smaller town as well.

Boman Irani, President, CREDAI said that contribution of real estate in the country’s GDP is expected to more than double in the next five years.

“Real estate currently accounts for about 6% of GDP but we expect it to reach 15-16% by 2027,” Irani said.

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