‘Infra status to affordable housing is the main focus’
New Delhi- Real estate of India hopes to get infrastructure status for affordable housing sector in the upcoming Union Budget 2013-2014.
From the past three years the real estate sector has been longing for industry status. The recent tax benefit on home loans provided by the Finance ministry has boosted the industry’s hope.
The Budgets of the last three fiscals did not give any positive relief to the sector left without any major benefits. Economic slowdown and liquidity crunch leading to project delays are putting realtors and investors into trouble.
Realty market experts observe that easy availability of funds to real estate companies can improve the current market scenario. Policies should also be formed such that they provide relief to mid and low-level buyers, said experts.
Infrastructure status to affordable housing is the main focus this year. The apartments lying in the price range of Rs 10 lakh to Rs 20 lakh are considered to be affordable. However, the range depends on the realty prices in the regional market.
RICS, a global consultancy firm, said that an industry status will help provide funds at lower interest rates as infrastructure is a priority sector lending area of banks. An industry status will make it easier for real estate developers to get finance from banks. It is also advantageous to developers, in getting an income tax benefit (of 100 percent) on their profits for 10 assessment years.
President (Bengal), Confederation of Real Estate Developers Association of India, said that incentives should be provided to developers for developing low-cost housing projects in order to keep the work going.
As per the market sources, the real estate sector which contributed 10 percent to India’s (GDP) in 2010-11 has now dropped to five percent.
Currently, an annual exemption of up to Rs 1 lakh is allowed on home loan interest.
When the exemption clause was introduced, the apartment prices were at least 40 percent lower than the current rates. The clause has to be modified and the exemption limit needs to be doubled.
Executive MD (South Asia) of Cushman & Wakefield, said that the sector demands a single window clearance system and streamlining approvals (that take between one and three years). He added that implementing the recommendations of Committee of Streamlining Approval Procedures for real estate projects will control the costs.
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