NAREDCO proposes measures to make ‘’housing for all’’ a reality
The chronic housing shortage in India requires reforms in the banking sector and investment policies. Then only Modi’s dream of Housing for all’ by 2022 will come true. Sunil Mantri the President of National Real Estate Development Council (NAREDCO) stated that currently the bank’s exposure to the realty sector is only 5 %. This is a very small exposure and this needs to increase to bring more people under the home loan ambit.
He also stated that internationally, it is between 20 % and 25 %. If only 5% of Indians can take the advantage of bank loans for purchasing a home, then a vast 95% will be deprived from the benefits. Mantri also stated that the sector had been facing a liquidity crunch and investment in the housing sector would have positive impact on the entire economy.
The home loan owners enjoy tax sops from the government and can manage to buy an expensive home by paying a small down payment and regular monthly EMIs. It is very difficult for any individual to shell out a huge amount upfront to buy a property. Hence if the rest of the 95% of the Indian population are not brought under the umbrella of home loans, then the ‘’housing for all’’ will remain a dream.
NAREDCO has put forward an agenda that it expects will help developers raise investments as also promote low-cost housing. Mantri stated that the real estate industry has been demanding this and an infrastructure status must be granted to the sector. The interest rate on retail loans should be brought down to 7 %.
Besides, loans should be provided for acquiring land when it is used for affordable housing under the Reserve Bank of India (RBI) guidelines for prioritisation of home loans. External commercial borrowings (ECB) should be allowed for the housing sector.
Source- The Hindu
ECB, External Commercial Borrowings, Naredco, National Real Estate Development Council, RBI guidelines for prioritisation of home loans, Reserve Bank of India
