Maharashtra govt bats for FDI in its new housing policy
Policy is currently being circulated among the legislators to seek their views
May 21, 2015
Source : Business Standard


Mumbai: The Maharashtra government has in its draft of the new housing policy proposed foreign direct investment (FDI) for the development of special townships.
Grant of additional floor space index (FSI),  especially to encourage affordable housing and creation of land bank are among the proposed measures.
The policy is currently being circulated among legislators for their views.
The draft has envisaged time-bound approval of clearances, promotion of self-certification and dis-incentivising retention of vacant land and flats in urban areas, through capital value-based property tax with reference to admissible FSI.
The draft policy suggests creation of transfer of development right (TDR) bank, use of TDR to use private land for civic and public amenities with a mechanism to prevent malpractices. It also proposes property value-index based TDR and fungible FSI to augment housing stock for low-income group and middle-income group in specified zones in metropolitan regions.
The draft policy states a “mere increase in FSI cannot be a solution for enhancing the affordable housing stock in cities. The FSI can be alternatively defined as a function of supporting infrastructure, which means the permissible FSI should be accompanied by optimum social and civic infrastructure.” These slew of steps will help the state achieve its objective of providing two million houses by 2022 in Maharashtra.
According to the policy, special township with FDI would be allowed. State-run City and Industrial Development Corporation would be the special planning authority. It would have 20 per cent housing on the built-up area for economically weaker sections.
The policy has said availability of land was the main factor affecting affordability. “It is necessary that government as well as the lands at the disposal of urban local bodies, CIDCO, Maharashtra Housing & Area Development Authority, Mumbai Metropolitan Region Development Authority and Pune Metropolitan Region Development Authority are pooled and used for affordable housing through land bank. This will help to check the price of affordable housing units.”
Furthermore, the policy suggests involving employers to provide housing for employees. Employers can be encouraged by providing concession in value-added tax, stamp duty, professional tax. They can be given similar sops in income tax, service tax and excise at the central level.
Sunil Mantri, President, National Real Estate Development Council, said: “The main hurdle is getting building permission. The government is charging a heavy premium, making housing expensive. Few days ago the state government took a decision that TDR be charged at 60 per cent of RR value as against 10-30 per cent of 2008 RR value. TDR prices have increased from Rs 3,000 per sq ft to Rs 6000 sq ft which will choke up housing supply as many projects have become un viable. The government needs to address these issue on a priority basis and see that how housing can be made cheaper,'' he noted.

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