Ministry to take decision tomorrow on FDI in real estate
Feb 27, 2014
Source : The Times of India

 

DELHI: Foreign Direct Investment (FDI) in real estate sector, the decision will likely to be taken in the next cabinet meeting which is going to be held on Thursday, said Arun Kumar Misra, Secretary, Ministry of Housing & Urban Poverty Alleviation at an ASSOCHAM event held in New Delhi today.

“In single-window clearance system, at least a large part of clearances out of 45 are digitized and should be online for clearance system. In the last one year, more than 43 towns in India have adopted the single window clearance system”, said Misra while speaking at 6th Affordable Housing Summit & Excellence Awards,’ organized by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

 He also pointed out, “Without the amendment of rent control laws, nearly 30 per cent people live on rent and more than 10 per cent of houses are lying vacant because of the rent control laws archives.  “We can’t have the central law, it has to be state law because the guidelines are already there, and next group of engagement will have to be amendment of rent control laws with the state government”, said Mr. Misra.

The state will have to come out with the urban housing policy (UHP). The transport and affodable housing has given us clearly what exactly requires to be done and I am very happy that states like Rajasthan, Karnataka and Haryana have taken as lead in affordable housing policy, said Secretary.

Inaugurating the ASSOCHAM summit, Girija Vyas, Union Minister for Housing & Urban Poverty Alleviation said that her ministry has recently launched Rajiv Awas Yojana (RAY). It envisages central government support for slum redevelopment and creation of affordable housing. In doing so, ministry encourage public private partnership (PPP) for future creation of affordable housing stock.

The revised affordable housing in partnership schemes is being launched to encourage state concessions and the creations of affordable housing stock for construction of half a million houses for economically weaker section (EWS)/ lower income group (LIG) segments. In this scheme, the government aims at encouraging partnerships between various agencies i.e Central &  State government/ housing boards and development authorities and Urban Local bodies (ULBs) for the creation of affordable housing, added Minister.

The scheme now gives increased subsidies to the tune of Rs 75,000 to economically weaker section to economically weaker sections (EWS) or low income group or LIG dwelling units of size 21-40 sq mt, in affodable housing projects being undertaken through various public private  partnerships (PPP).

The Rajiv Rinn Yojana (RRY) scheme focuses on demand side incentives wherein ministry of housing & urban poverty alleviation provides 5 per cent interest subsidy on housing loans up to Rs 5 Lakh. This scheme is also likely to be launched by August this year, mentioned Dr. Vyas.

Between Rajiv Awas Yojana (RAY), Rajiv Rinn Yojana (RRY) and Affordable Housing in partnership schemes (AHP), the government of India will support establishment of 2.5 million housing units, added Dr. Vyas.

“The top 10 cities in India viz. Mumbai, Delhi-NCR, Bengaluru, Chennai, Kolkata, Ahemdabad, Kochi, Chandigarh, Pune and Hyderabad account for 15-20 per cent of the overall supply in urban India”, highlighted Vyas.

With the effort to reduce the demand-supply gap in this segment, it is noteworthy that from 2007-2012, housing shortfall has declined from 24.8 miilion to 18.7 million, a 25 per cent reduction, quoted Dr. Vyas.

The real estate sector in India has been a high growth story.  The construction industry is the second largest industry of the country after agriculture accounting for 11 per cent of India’s GDP. Indian construction industry employs 32 million people and its total market size is estimated at Rs 2480 billion.

Vyas said, “Ministry focuses on housing for the urban poor, housing represents a key component of economic growth contributing 5 per cent to the GDP and there still being a shortfall of 18.7 per cent million units. I welcome and laud theses developers in supporting the government of India in progressing towards its goal of provision of housing for all”.

Rana Kapoor president ASSOCHAM said, “Nearly 28 per cent of India’s population lives in cities and urban areas, a figure that is expected to rise to 40 per cent by 2020. Majority of housing in urban areas caters to the premium segment; thereby a large section of society is unable to own homes. According to the National Housing Board (NHB), an investment of Rs 8.5 trillion is required for construction of Affordable Housing in slum and non-slum areas.

Establishing policies that mandate developers to make provisions for the Economically Weaker Sections (EWS) and Low Income Groups (LIG) will encourage the private sector to take up Affordable Housing projects and ensure their timely delivery. Measures like ensuring availability of developed land, TDR, long tenor finance and cheaper loans, priority sector lending, viability gap funding and single window clearances will encourage private sector investment and provide much needed impetus to the Affordable Housing segment”, said Kapoor.

Other who also spoke during the conference were Navin M Raheja, chairman, Real Estate Committee, ASSOCHAM and CMD, Raheja Developers Ltd., B C Jain, co – chairman, Real Estate Committee, ASSOCHAM & chairman, Sunrise Housing Constructions Limited and D.S. Rawat, secretary general, ASSOCHAM.

 

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