However India’s housing also wants to get affordable and it is exploring how. It dreams to be the next aviation sector of India, which showed exponential growth by doling out cheap air tickets to India’s common man with an average income.
Nonetheless the Indian government is patting its back for giving out a handful of sops to the housing sector and is wondering why it should not be given its due credit, the real estate industry is still getting its act together after facing four ‘tsunamis’ — demonetisation, rera, gst and insolvency about several issues.
However at a recently held event in New Delhi, political leaders and government officials from the housing sector gave an audience to the developers on policies’ overhaul.
The individuals who were speaking at the event, Narender Singh Tomar, Minister of Housing & Urban Affairs, Rural Development, Panchayati Raj and Drinking Water & Sanitation, said the government was committed to fulfil the Housing for All dream. He put the onus of growth in the sector on developers saying it is the collective responsibility of all the stakeholders to do so and even more.
In the words of Tomar “The glitches and loopholes, if at all, prevail in the real estate sector despite the fact that the government has already brought out friendly regulations. The earlier hostile clauses in the real estate policies have been kept aside to ensure equitable growth in the real estate and construction sector, it is still open for improvements,”
However Durga Shankar Mishra, Secretary, Ministry of Housing and Urban Affairs (HUA) counted a number of measures introduced by the government for the housing sector – CLSS, online building approval, easy land acquisition, access to technology and one tax under GST and announced several good news.
In the words of Mishra “The government has extended the Credit Linked Subsidy Scheme (CLSS) to the mid-income group home buyers. This interest rate subvention scheme should generate demand in the housing sector. We need developers’ contribution as they need to take the benefit to the people who can consume the ready inventory,”
However, is this enough for the real estate sector to achieve the growth it aspires for or should there be more?
To be honest the developers and industry experts are far from being pleased. They even raised a lot of concerns which they assert are hindrances to attain the Housing for All Mission. For them, 2017 has not been a normal year for any trade in the country, including the real estate sector and they gave ample examples.
Moreover even the developers agreed that low-cost housing is the future of the country but they were still unsure about its timeline. There were even murmurs of introducing amendments in the recent policy changes.
However “When GST was introduced, we were told that it will not cause any incremental tax on the housing sector. Which meant that it will be tax neutral. Industry experts said that a minimum escalation of costs comes to 3 per cent for projects and about 5.5-6 per cent where land cost is higher. The government is charging tax, irrespective of affordable housing or regular housing,” said Dr Niranjan Hiranandani, president, Naredco and co-founder and managing director of Hiranandani Group.
In the words of Hirandanini “We want the government to make housing sector tax neutral by making the adjustment for land cost. We are not asking anything special. For affordable housing the tax should not be 12 per cent but 6 per cent. The land cost are incrementally increasing. It is the need of the hour to use the government land for affordable housing to make it economically viable,”.
Nonetheless industry experts agree with him. “Sales are down and it will take a long time for the market to revive. This is not the year for assessments,” said Ramesh Nair, CEO and Country Head, India at JLL.
However developers need the government to show more passion for the real estate sector. The government, on the other hand, wants the sector to be passionate about the new policies. Nonetheless between them is the consumer who nestles the passion of owning a home and wonders when he will be able to attain it and holds on to his or her hope.