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6) Real Estate Investment Trusts (REITs) are critical to property market development in India , but face unique challenges. comment. (250 words)

Topic:  Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

6) Real Estate Investment Trusts (REITs) are critical to property market development in India , but face unique challenges. comment. (250 words)

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Why this question:

The article highlights the fact that REITs have an important role to play in the formalization of the Indian real estate sector. It also discusses in detail the associated challenges.

Key demand of the question:

The answer must trace the issues related to the Real estate investment trust in India, how these challenges and concerns should be overcome and REITs should be made to drive the property market in India.

Directive word:

Commenthere we have to express our knowledge and understanding of the issue and form an overall opinion thereupon.

Structure of the answer:

Introduction:

Introduce by highlighting the current scenario of REITs. Discuss in short the salient features of it.

Body:

In brief discuss the following points :

  • What are REITs? Importance of REITs.
  • Discuss the role of REITs in combining regular rental income with capital appreciation from property prices.
  • Bring out the concerns related to REITs – lack of investor awareness, peculiar challenges that the Indian market poses to the REIT structure, complicated land acquisition, fragmented property market, complicated Taxation of REIT returns etc.
  • Suggest what should be done.

Conclusion:

Conclude with way forward.