Affordable housing sector to get infrastructure status
The government is to consider giving infrastructure status to the housing sector in order to provide affordable housing to the financially weaker section.
A senior official from Housing and Urban Poverty Alleviation (HUPA) said, the proposal has already been taken up with the Finance Ministry and the Reserve Bank of India, and is expecting a positive response in the coming Budget session.
The official added that the ministry will also consider providing income tax and service tax benefit to the sector.
Infrastructure status will provide easy access to funds and thereby increasing the availability of houses and hence it will boost the housing sector.
According to a study made by the technical group on urban housing shortage, 2012, they found that there was a shortage of 18.78 million units. Majorly, the shortage was for financially weaker section (10.55 million units) followed by lower income group (7.41 million units).
The officials feel that the infrastructure status of housing will increase the flow of finance to the sector. This in turn will encourage the developers to come up with more affordable projects, which is expected to create a balance in demand and supply for housing.
The ministry will bring the Real Estate (Regulation and Development) Bill, 2013, in Parliament. Once the Bill is passed it will act as an industry watchdog that will keep a lease on land sharks and fly-by-night operators, by setting up of the Real Estate Regulatory Authority.
The real estate developers have suggested the Ministry for some changes on the Bill. The Bill states that the builders have to maintain an account where 70 percent of the funds received from the buyers will be deposited mandatorily, and to ensure that these amount are used only for that real estate project only.
The aim behind this is to bring simplicity and accountability in the real estate sector. After the implementation of the regulatory authority, the registration of real estate developers will be mandatory. Funds collected from buyers for a particular housing project cannot be diverted to other project and the developer will be restricted in announcing new project before getting all mandatory clearances like environment, fire and others.
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