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How 7th Pay Commission's recommendations will boost the real estate sector?
The implementation of the 7th Pay Commission is an important milestone in the real-estate cycle as the increase in salaries of government employees is likely to boost the demand for home purchases.

The recommendations are expected to raise the incomes of 3.4 crore employees and pensioners once the state and central governments implement them. So, the housing sector is expected to be the biggest beneficiaries of the rise in income and spending capacity of government employees.

While on the supply side the country's real estate sector is likely to be supported by recent easing of foreign direct investment (FDI) norms by the government, the implementation of the pay panel proposals will play a crucial role on the demand side.

The pay panel proposes a hefty salary and pension hike for Central government employees and pensioners. The recommended 16 per cent rise in basic salary and the 138.7 per cent increase in house rent allowance (HRA) could spur demand for housing. While the subsidized housing loan limit has been hiked, at the same time the period of continuous service to avail it has been reduced.

Hence, those employees who will see an increase in monthly salary are likely to play a key role in pushing up the demand in the housing sector.

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