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The real estate sector accounted for a sizeable proportion of total investment, as of December 2011, in seven of the top 20 States, an Assocham study said on Monday.
Reflecting a realty rush bordering Delhi, particularly from Gurgaon, Haryana saw 49.7 per cent of its investment coming in the real estate sector. The other States attracting sizeable interest in the sector included Uttar Pradesh, Maharashtra, Gujarat, Karnataka, Andhra Pradesh, Tamil Nadu, Rajasthan and Punjab.
The investment in real estate has a “very strong” nexus with the growth and investors’ interest in the services sector which also attracted good investment in the States fancied by investors in the realty sector.
Mr D S Rawat, Secretary General, ASSOCHAM, said as of December 2011, the services sector accounted for about 34 per cent of its total investment in Haryana and 37 per cent in Uttar Pradesh. In Gujarat, it accounted for 16 per cent, while it was 38.5 per cent in Punjab, 30.8 per cent in Tamil Nadu and 24.6 per cent in Karnataka.
Only Kerala and Jammu and Kashmir showed there was not much of a relationship between investments in services and real sector sectors.
In Jammu and Kashmir, fresh money committed towards services sector accounted for 56 per cent of the total investment, but in the realty sector it was just about 0.7 per cent of the total funds invested in the State.
What Gurgaon has done to Haryana in terms of investors’ interest in the real estate sectors, Noida and Greater Noida have done it for Uttar Pradesh, though on a lesser scale as the state is many times bigger than Haryana. In Uttar Pradesh, the realty sector accounted for 22 per cent of the total investment in the state.
Of its total investment of Rs 4.98 lakh crore as on December 2011, the real estate sector accounted for Rs 2.48 lakh crore in Haryana, where Faridabad, Sonepat, Ambala, Panipat and Karnal also saw the realty sector growing fast, even though they are no match for Gurgaon.
The “progressive states” invested in development of the primary sector and created quality infrastructure networks and investor friendly policy framework. The States have gradually been confining themselves to the role of regulator while the private sector develops and manages the industry and services sectors, the study suggested.
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