A report says that in 2031, around 600 million Indians will live in urban areas (increment of approximately 200 million in 20 years). That will be a situation of extreme pressure in the socio-economic conditions of the country. However, coming back to the present time, the estimated slum population of India is about 94.98 million, while the housing units sanctioned under JNNURM is 1.6 million. A wide mismatch can be analyzed. But what steps can fill this gap?A research in 2012 shows that close to 18.78 million housing unit shortage prevails in urban areas. The factor responsible for this situation is the lack of funds. The real estate industry in the country is facing challenges in raising funds for the construction of housing units for the unprivileged and lower income groups. Research suggests that the formation of a Real Estate Investment Trust (REIT) might be helpful in abridging the gap.REIT is a body that handles the assets that generate income in real estate and provide trading solutions to the investors. Analysts say that REIT has high potential that will produce definite and pragmatic solutions to sort out the problem of housing shortage and might enable builders to look forward in the real estate investment so that funds can be raised to build dwelling units.Poor financial options are found to be the prime reason for the shortage of fresh supply of houses. Due to lack of funds, the property prices are also rising which is prohibiting the investors to invest. REIT will ensure the supply of capital in the real estate development which will boost the supply of houses and also help in gaining more investment in the sector.