CREDAI demands for inclusive housing policy
New-Delhi- In order to boost the small and affordable housing units, the developers apex body CREDAI has demanded for an inclusive housing policy to the Finance Minister. They have further asked the Finance Minister to initiate the tax incentives which can make the realty sector a new growth of the Indian economy.
CREDAI which presented its budget wish list some days ago, asked the Finance Minister for the exemption of tax for smaller houses under 60-sq mtr of carpet area along with the initiation of the special housing zones with tax exemptions on the lines of SEZ for constructing 45 sq mtr houses to cater the low income groups and 30 sq mtr houses for the economically weaker sections.
India has an increased housing shortage of about 18.1 million houses with a demand of another 10 million houses. As per an official, there is an increased need for the government to take a pragmatic and practical step towards the realty sector which can further boost the economy of the country.
He further stated that the initiation of the reliefs under sections 80 IB and 80 IA of Income Tax act in 1998 had increased the entire economy due to the direct tax benefits which resulted in multiplication of the indirect tax revenues of the centre and increase in revenue through stamp duty and other taxes.
As per studies, the Indian realty sector contributes about 5.5 percent to the GDP along with the construction industry which leads to a revenue generation of about 11 percent. Perhaps, realty experts do not see a reason as to why real estate cannot become the country’s future growth engine contributing to the Indian Economy. They feel that the sector is highly capital an labor intensive. They are confident about about the sector contributing in the sky high GDP growth as there are over 400 industries which depend on the real estate and the construction units.
It was seen that in the past few months, the credit to commercial real estate reduced to about 13 percent with the priority lending to housing sector by 1.29 percent. The overall CRE was just 4 percent.
The official insisted that the current risk weight-age of 1.25 percent by the RBI resulted in tightening of the bank finance to real estate which apparently impacted the availability of the housing stock and the current market-driven high prices. Henceforth, CREDAI demanded for the scrapping of the RBI risk weight-age and asked for banking reforms and easy facilitation of the low-cost funding for housing. This will result in the developers increasing their supply and bringing down the prices.
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developers apex body CREDAI, direct tax benefits, economically weaker sections, economy of the country, increased housing shortage, Low income groups, New Delhi, revenue through stamp duty, small and affordable housing units, tax incentives
