Thursday, 5 March 2015

Housing For All By 2022 – How Can the Government Achieve It?

On 16thMay, 2014 when the BJP and particularly the Mr. NarendraModi recorded a historic win, every Indian in the country became hopeful, hopeful of a better India, a better place to live.

Over the months, our government has spoken about many plans, reforms, and much more that they would be coming up with, one of the them being the very popular Housing for all by 2022. It has captured the interest of both homebuyers and real estate developers together.

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But, it will not be an easy task for them. To realize this dream the government will have to lay the foundation for a strong enabling framework. There are several challenges that this policy will face like lack of incentives, an effective policy framework, delay in finances and so much more.

Here are a list of issues and suggestions that the government can focus on to realize the basic dream of a roti kapdaaurmakaan of our countrymen.

  • The tiniest of real estate projects in our country require multiple approvals from different authorities. This increases the complexity of the entire process thereby delaying it which adds up to the cost. There must be a single window from where the developers would get all the approvals to help fasten the entire process.
  • Inadequate access to finances is another of the major concerns of the real estate industry which needs immediate attention. Lack of adequate finance can contribute to unwarranted delays and increase in cost of the project. Granting infrastructure status to housing and real estate development would help tackle this issue.
  • Multiplicity of fees and taxes applicable to the sector is another dampener. As per a KPMG report, Decoding Housing for All by 2022, various taxes and levies on the sector go on to increase the housing cost by almost 30% to 35%. Clarity on inclusion of real estate under the ambit of goods and service tax (GST) regime would help in rationalization of these taxes.
  • Providing tax benefits to both real estate developers as well as homebuyers will help attract both, creating a win win situation for them. Re-introduction of tax benefits under Section 80-IB of the Income Tax Act 1961 (the Act) for affordable housing could play a major role in encouraging low cost housing.
Do let us know your feedback and suggestions to help India realize the dream of Housing for all by 2022.

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