The CREDAI (Confederation of Real Estate
Developers Associations of India) has come up with a roadmap to reform Indian
realt estate sector with a view to make India a housing surplus from the
current status of a housing deficit nation, by 2020.
10 Point
Agenda.. !
Unveiling its
10-point agenda, this apex body of Indin real estate developers has called for
comprehensive reforms for the sector covering land, banking, administration and
taxation among other areas.
In an open
letter addressed to the Prime Minister, Dr. Man Mohan Singh, CREDAI has sought single
window clearance for projects and increase in FSI besides cut in interest rates
on housing loans to 7% LIG and EWS segments and bringing down project finance
rate of banks from current 14to 16% to 9%.
FSI 4..!
Making a case for single window approval system, Mr. Lalit Kumar Jain, President, CREDAI said , ''The delays in approvals (with average sanction time amounting to 18 months) increase sale value of houses by 40% and faster approvals can help cut down property prices by 25%. CREDAI has asked the government to permit higher FSI (Floor Space Index) of 4 against the current FSI limit of up to 2.5 in order to create adequate supply & stabilise property prices".
On the fiscal reforms front, CREDAI has demanded easing of FDI (Forgein Direct Invetment) rules by reducing the current area restriction of 50,000 square meter and 25 acres by 20% and allowing FDI in retail It has also sought permission to allow housing finance institutions to directly access ECB (External Commercila Borrowing) to bring down cost of housing loan.
Making a case for single window approval system, Mr. Lalit Kumar Jain, President, CREDAI said , ''The delays in approvals (with average sanction time amounting to 18 months) increase sale value of houses by 40% and faster approvals can help cut down property prices by 25%. CREDAI has asked the government to permit higher FSI (Floor Space Index) of 4 against the current FSI limit of up to 2.5 in order to create adequate supply & stabilise property prices".
On the fiscal reforms front, CREDAI has demanded easing of FDI (Forgein Direct Invetment) rules by reducing the current area restriction of 50,000 square meter and 25 acres by 20% and allowing FDI in retail It has also sought permission to allow housing finance institutions to directly access ECB (External Commercila Borrowing) to bring down cost of housing loan.
Home buyers pay
36% Taxes..!
Considering that
house buyers pay 36% in direct and indirect taxes in the form of VAT (Value
added Tax) service tax, excise duty, municipal taxes etc, Mr. Jain made a case
for a special tax-free affordable housing project scheme & Special
Residential Zones on the lines of SEZs for integrated townships, availing tax
benefits.
In order to further encourage affordable
housing, Mr. Jain demanded that all rental income in affordable sector
should be tax - free and service tax on rental earnings from property should be
abolished.
According to Pradeep Jain, chairman, CREDAI, other reforms demanded by CREDAI include abolition of the provision of MAT on SEZs, inclusion of stamp duty in GST, abolition of excise on prefab and such construction elements, waiving import duty on specified equipment, developing transparent mechanism in slum redevelopment, reducing cost of business by increasing supply and boosting skill development programme through funding and special incentive to training and research institutes.
On the controversial issue of real estate regulator, CREDAI has called for setting up a comprehensive regulator with an authority to direct all stakeholders in order to achieve its desired purpose.
According to Pradeep Jain, chairman, CREDAI, other reforms demanded by CREDAI include abolition of the provision of MAT on SEZs, inclusion of stamp duty in GST, abolition of excise on prefab and such construction elements, waiving import duty on specified equipment, developing transparent mechanism in slum redevelopment, reducing cost of business by increasing supply and boosting skill development programme through funding and special incentive to training and research institutes.
On the controversial issue of real estate regulator, CREDAI has called for setting up a comprehensive regulator with an authority to direct all stakeholders in order to achieve its desired purpose.
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