Government should give more assistance to real estate sector

As real estate sector provides substantial employment, capital generation and enables economic activities such as manufacturing, trading, services, etc., the sector should be considered for similar benefits as provided and recognized like other “infrastructure sectors” such as roads, dams, airports, etc. which will prove very beneficial to the Indian economy at large, according to a leading international real estate research firm.

Suggesting that the RBI and the Government should now recognize the contribution of the Indian real estate sector to the economy, Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield, said on the eve of Union Budget 2013 that, “There is a strong rationale to protect and boost the housing sector, as according to a government estimate there is a current shortfall of 18.78 million units in urban India. Indian real estate needs to be provided with requisite Government and institutional support to ensure its long term and sustainable growth in a manner that is beneficial to all segments of society.”

Exphasising that the government needs to assist the real estate sector end-to-end through transparency at all stages and enabling performance through efficiencies, he said that the sector has been suffering because of land acquisition or conversion process, low Floor Space Index (FSI), expensive or no debt and ability to attract foreign or private capital,  no incentive to import and set up of smart construction technologies or pre-fab plants, slow development and almost impossible environment approval processes at Centre level. 

“The Government needs to reform itself before thinking of regulating the sector more. For the urban and rural poor, the income tax deduction under Section 80-IB should be re-introduced in the Parliament in order to generate interest of developers in Low Income Group (LIG) and affordable housing where demand exceeds supply substantially. Additionally, the budget should focus on extending interest subvention for affordable housing, which was 1% on housing loans of up to Rs. 15 lakhs. This will continue to have a positive impact on residential sales in small cities and towns and peripheral locations of major metros where the units are priced up to Rs. 25 lakhs,” he further stated.