The Prime Minister’s vision of “Homes for All by 2022” got a boost with the announcement of an affordable housing fund in the National Housing Bank (NHB). Being funded from priority sector lending shortfall and fully serviced bonds authorized by the Indian government, it will act as a catalyst in fulfilling the objectives of this initiative. The government’s efforts in promoting affordable housing is commendable-be it granting industry status or expanding the carpet area amongst others. Given that significant enablers are put in place we hope to see better traction in the near future. It is also encouraging to see the government address the issues of housing in urban areas. The assistance provided to construct 37 lakh houses in urban areas will take care of the urban housing woes, while financial assistance of Rs.2.04 lakh crore to 99 Smart Cities will ease the pressure on the existing urban centres.
Similarly, the massive push for improvement in infrastructure in the budget, including significant capital expenditure for roads, railways and development of smaller airports will indirectly benefit affordable housing in the long run. This will provide better connectivity and have a multiplier effect thereby allowing developers to explore new projects in the peripheral areas of the cities. However, the lack of availability of urban land at reasonable price and single window clearance continues to be a major constraint and the government is yet to address this issue. Rising costs of construction, high fees and taxes, regulatory issues & unfavorable development norms are of the other roadblocks which could restrict the desired growth and implementation of affordable housing in India. It is important to note that the government has brought significant regulatory changes in the real estate sector in the last one year. From demonetization to the introduction of RERA and GST all have been aimed at improving consumer confidence in this sector. So, we had expected that the budget will come out with reforms that will stimulate demand and pave the way for a smooth recovery in 2018. In that sense it is disappointing that the housing sector could not get any direct benefit in this budget.
Going forward we would like the government to look into pressing issues that have been highlighted by industry bodies at regular intervals. GST and stamp duty issues must be addressed at the earliest. The digitization of land records and insuring property titles will improve confidence amongst investors. It is extremely important to “deregulate” not “over regulate”, provide faster approvals and clearance, make available institutional credit at attractive rates. The industry can only achieve international levels of productivity if these issues are attended to. While the FM took pride that we have made it to the top 100 in the Ease of Doing Business rankings we would also like him to look into the Ease of Obtaining Construction Permits Index and better our rankings there. Currently, we are placed at 181 out 190 countries thereby leaving significant scope for improvement here.
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