Navin Raheja, President, Naredco
What is the reaction of the real estate industry to the Budget? Of the key demands, post Budget, what needs to be done on a priority basis?
The National Real Estate Development Council (Naredco) is extremely disappointed with the Budget proposals. The Council in its memorandum to the finance and housing ministries had suggested conferring infrastructure status to integrated township and group housing and giving income tax relief to developers and buyers to stimulate demand and supply. Besides, there is a need for monetary interventions to lower interest rates, to bring down costs both for developers and home buyers. We hope that the RBI will address them to give the much needed boost to the sector.
The Budget offered an additional deduction of Rs 1 lakh for a first home loan up to Rs 25 lakh for FY14. How do you evaluate this proposal?
Naredco is happy that the proposal would benefit first time home buyers. The net deduction now available will be up to Rs 2.5 lakh and would definitely boost demand and supply in tier II and III cities. In metros, where average cost of house is above Rs 50 lakh, it would be of no help.
What are your views on the proposal to set up an urban housing fund?
It is a welcome step. Naredco had been advocating the ‘shelter fund’ to mitigate the problems of low income groups and economically weaker sections who are deprived of decent living conditions and are forced to live in unauthorised colonies and slums or be a squatter. This will help in eradicating slums, where nearly 25 per cent of urban population live. Housing finance institutions will get encouragement and their risk will be appropriately covered.
Are the Budget proposals to boost affordable housing different from the earlier pronouncements on ECBs for low cost housing?
External commercial borrowings (ECBs) permitted in Budget 2012-2013 for affordable housing has been operationalised. This will help in creating capital, at low cost, for the development of affordable housing projects. The urban housing fund will primarily help low income buyers in accessing home loans. This, and the interest subsidy scheme will help the poor in buying a house.
Corporate governance is a major issue in the sector, as the RBI pointed out. Does Naredco have a time-bound agenda in this regard?
Naredco is continuously working on it. Enacting the real estate regulation Bill, simplified project approvals and the new accounting procedure will help a lot in achieving this objective.
Source: The Indian Express