By Mr. Rana Kapoor, ASSOCHAM
India has about 495 urban cities with over 1 lakh population and about 7,935 cities and towns, which can act as
catalysts of economic growth.
ASSOCHAM ( Associated Chambers of Commerce and Industry of India )
believes that Affordable Housing sector has the potential to stimulate
significant and immediate multiplier effect in creating employment and demand
in key sectors, like Power, Steel and Cement, thereby reinvigorating the
economy.
The country currently requires 1.878 Crore additional houses, of
which 95.62 % are in the Economically Weaker Section (EWS) / Lower Income Group
(LIG) / Middle Income Group (MIG).
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| Rana Kapoor, ASSOCHAM |
ASSOCHAM recommends the following measures in the Affordable Housing
sector:
Immediate / short term objectives should consider:
Providing an infrastructure status for the Affordable Housing sector
to attract more capital and investment formation
Digitisation of land records..
• • Insurance / Pension funds to be allowed to
invest in the Affordable Housing sector.
• • Ease the conditions for
Foreign direct investment (FDI) in real
estate and reduce minimum capital requirement from $10 crore $50 lakh and
minimum tenure before repatriation from 3 years to 1 year.
• • Review / Repeal Sec 43C in the Income Tax Act on taxation at
circle rate and restore 80 IB (10).
• • Tax exemption on income derived by an undertaking, engaged in
development and construction of smaller dwelling units.
• • Review RBI (Reserve Bank Of India) norms for project finance;
uniformity in the end user income ceiling norms for Affordable Housing units
for EWS and LIG.
• • Impetus to the essential infrastructure at the outskirts of tier
I / or tier II cities to ensure Affordable Housing clusters are well connected
and cities are de to congested.
Medium / long term objectives should consider..
• • Rationalisation of Direct and Indirect
taxes in the real estate industry to enable competitive pricing for the end
user.
•• Single window approval
mechanism for Housing Sector as against approvals through 150 tables across 40
departments of Centre, State Govt. and Municipal Corporations.
• • Mandating developers
across country to construct EWS / LIG units and authority to create enabling
environment with increased Floor Area Ratio / Floor Space Index (FAR / FSI).
• • Incentivize low cost and innovative technologies such as prefab
for producing large volumes of Affordable Housing units.
• • Develop a full proof mechanism for rental housing and ensuring
implementation of REITs (Real Estate Investment Trusts ) under the same.
• • Availability of higher FSI
with relaxed density norms for Affordable Housing projects.
I believe India is at a crossroads of experiencing rapid urbanization
in the current decade and addressing the concerns of Affordable Housing is the
need of the hour.
Given the slowdown in the real estate sector, additional HNI (High
Net Worth Individuals) investments in the sector at high interest costs and the
increase in ready reckoner rates by some state governments, will only push up
property prices further. Taking adequate and appropriate measures to increase
Affordable Housing alternatives will not only create a GDP (Gross domestic
product ) multiplier, but also improve the living standards of Indian citizens.
About the author
Mr. Rana Kapoor is President at ASSOCHAM
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