Keki Mistry’s 5 point solution to provide affordable housing
Modi government is determined to provide housing for all by India’s 75th independence day and the market experts are geared up to help Modi in this agenda. Housing especially for the poor has always been a priority for the National Democratic Alliance (NDA) government. In its previous term lead by the then P.M Shri Atal Bihari Vajpayee, the NDA introduced tax breaks on home loans that gave a big boost not just for urban housing but also to retail lending.
Keki Mistry the vice chairman and CEO of HDFC home finance — the country’s largest housing finance company has charted out five measures that will help boost affordable housing in the country. He believes that this will go a long way in achieving the goal of having ‘homes for all’.
New cities: Metros are over populated which increase the price of the property. Adding 100 new cities as declared by the Modi government would greatly increase the supply of housing and would bring about a check on prices.
Tax breaks on home loan interest: Ever since the exemption limit of Rs 1.5 lakh (annual interest on home loans) was announced, the cost of housing and individual incomes has gone up by many notches. The government needs to look at the revised limits as 1.5 lakhs is very little for the current market with individuals earning handsome salaries in MNCs and double income families looking at better tax saving instruments.
Quicker clearances: The biggest reason for cost escalation is delays and very often delays are because of non-availability of timely clearances. If the government can tackle this problem then the cost of housing will go down tremendously.
Hike external borrowing limits: If the housing finance companies get access to cheap funds, they will be able to pass on the benefits to the consumers by providing home loans at lower rates of interest.
Better tax compliance: There is a lot of tax evasion which affects the government’s income. If the tax evaders are caught and the entire nation pays tax diligently, then the money can be used for the infrastructure and housing projects.
Source- The Times of India
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