What builders want from the new government (2)
With just a week to go before the new government is formed, developers point out what needs to be done to boost the real estate industry.
Abhisheck Lodha, director, Lodha Group, says, ”The wish list will revolve around two sets of things. Firstly, the continuation of the overall development and liberalisation of the economy and secondly, streamlining the regulations and clearance process to reduce the time lapse in starting the project. It should also aim at making such policy measures that boost low-cost housing. Lowering of interest rates is a gradual process but the government should work on making the market more transparent, encouraging private sector participation and act on policy level to make a difference.”
Besides these, developers repeatedly emphasise on simplification of taxes on construction materials like cement, steel and other essential commodities. With cement prices escalating at Rs 260 to Rs. 300 a bag, mass housing could remain a dream feel developers. Land regulation is under the jurisdiction of the state government, but the central government issues policy directions from time to time which are not always followed by the states. The central government has to see them being followed through measures like conditional funding, as they have done under the JNNURM scheme. Similarly, cement cartelisation must also be controlled.
The government should clearly define whether the units should be sold on carpet area or any other parameter. Whatever the case may be there has to be a clear-cut definition of the saleable area with no scope for ambiguity. The formalities of acquiring a home should also be simplified. It is only in this way that the industry could be freed from its continuous cyclical boom and bust scenarios and the supply could be absorbed by a larger number of people. The rate of stamp duty also needs to be drastically reduced and made uniform across states.
Many builders unanimously recommend better regulation and widening the scope for foreign direct investments, and encouragement of REIT and REMF as it is only through these measures that real estate will be able to attract the large amount of money that is required for the kind of development we are envisaging for future development. It should allow foreign buyers to invest in commercial property as FDI is one of the greatest contributors in the real estate sector.
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