Looking for sops to make housing affordable

Looking for sops to make housing affordable
The Financial Express, May 18, 2009, Page 4

fe Bureau, Mumbai

Real estate developers are upbeat about the Congress-led United Progressive Alliance (UPA) winning in comfortable numbers. In order to provide a boost to affordable housing and bring the expected revival in the liquidity starved real estate sector, developers have stressed the need for the new government to implement various incentives in the financial year 2009-10.

Lalit Kumar Jain, chairman, Kumar Builders and vice president, CREDAI told FE, “Currently, 36% of the sale price of accommodation goes in stamp duty, excise and VAT apart from income tax, and, local taxes of the state government. It is necessary that the new UPA government to completely eradicates the 36% additional burden to home buyers and make housing affordable to all. Besides, special residential zones (SRZs) should be developed on the lines of special economy zones (SEZs) for implementing affordable housing projects.”

Apart from this, Jain adds, “We are sure the new UPA government will give way to urban infrastructure development which includes development of large corridors such as Delhi-Mumbai corridors apart from forming logistic highways over roads, among others.”
Niranjan Hiranandani, managing director, Hiranandani Constructions too opines on similar lines and states that it is becoming difficult now for every home buyer to own a house based on his choice and within his budget. Hence, the new UPA government should focus at incentivising the evolving needs for affordable housing, he said.

Brotin Banerjee, managing director & chief executive officer of Tata Housing Development Company Ltd, wants the government to provide land to the builders so that builders can look beyond extended suburbs and start developing affordable home projects in the suburbs of the metros for all needy home buyers.

Meanwhile, there are certain developers who feel that a strong and stable government can help the economy move towards recovery by attracting foreign investors at a quicker pace for infrastructure development. Rajesh Vardhan, managing director, Vardhman Group, “The last two months have seen FII inflows of almost two billion dollars. A strong and stable government can help the economy attract foreign investors as well as lead a turnaround over the next one year.” He added, with the UPA winning a majority, the economy can now look forward to a stable government at the centre. In its last term, the UPA government invested heavily in infrastructure development, which is something that needs to be continued with renewed vigour.”

Meanwhile, builder Vyomesh Shah, managing director, Akruti City has stressed the need for home loans and loans for roads to be available at not more than 6.5% to 7% interest. Also, business loans should be in single digit. “A stable government in India would mean a more favoured destination for investors. The new government should immediately improve tax laws and create a simplified climate for businesses to improve,” he added.

Anuj Puri, chairman & country head, Jones Lang LaSalle Meghraj (JLLM) concludes, “Which particular segments of the Indian business will get the bigger boost, and whether the real estate and retail sectors will get a badly-needed shot in the arm, depends entirely on the perceptions and interpretations of this government.

These sectors are in dire need of a boost, and we expect progressive policies to be put in place for this purpose. In any case, we can be assured that the end result will add new growth dimensions to the GDP—and this will definitely help the real estate and retail sectors.”