Vipul Thakkar, Pres, Credai Gujarat and MD,Sapthagiri Hospitality
Even as the Union Govt is pushing its reformist agenda to give a much needed push to the beleaguered real estate sector, still it is lagging when it comes to providing tax sops for the housing sector and not weighing on the views of stakeholders [including CREDAI] in the process, says Vipul Thakkar, President- Credai Gujarat and Managing Director, Sapthagiri Hospitality Pvt Ltd (co-developer of a Five-star category hotel and convention center at Dahej SEZ in Gujarat].
Excerpts of his Interview with Sandeep Pattnaik of Gharabari.com...
Q.1. There is no clear roadmap from the Union Budget this time for the housing sector, as experts said, though the Govt has announced to build 6 crore houses by 2022. What is your view?
Ans. At this juncture, I think it would be too premature to see the moves of the government as the stepping stones for 2022 which is being termed as year of "Amrut Mahotsav" and I have good reason to support my statement. Undoubtedly, The Union Budget 2015, by the government is continuing to strengthen on its developmental agenda by doing a balancing act on the Infrastructure sector, with the announcement of investments to go up by Rs. 70,000 crores. Another welcome move is the additional announcement of 2 crore houses in the rural and 5 crore houses in the urban areas along with the jurisprudence initiatives by the Finance Minister in giving due credibility to the real estate sector by the introduction of the Benami Property Transaction Bill Act that would largely help tackle black money transactions in the real estate sector.
But at the same time the sector also feels that with no action on reintroduction of Tax Sops, under section 80-1B(10) to provide tax benefits for the housing sector and the larger issue of not according the much required ‘industry status’ to the real estate sector could eventually slow down the overall growth agenda. An addition to the home loans exemption limit would also have provided the necessary push to the sector. Having said so, I would like to strongly add that if the government is to fulfil its goals of actually celebrating “Amrut Mahotsav”; it shall have to tow hand in hand with organizations such as CREDAI and heed its suggestions, such as removal of service tax for the sector which unfortunately was increased to 14% from the already burdening 12.36%, and with such PPP approach a far easier and long term solution can be approached to achieve housing for all in 2022.
Q.2. Land Ordinance had to face stiff opposition across political parties and other stakeholders. Which are the grey areas those need a rethink from the Govt, according to you?
Ans. I believe before concentrating on how to get the bill that is already passed in lok sabha and has to face its litmus test in rajya sabha, the government should largely focus on how to make the bill more effective. There has to be a synchronised approach to finding balanced provisions in the act. The very farmers that it is hoping to protect will eventually become victims. I believe the entire process should be stalled by the government and the opposition to give CREDAI, Farmer associations and other affected parties a chance to represent their views, rather than trying to prove each other’s power.
Q.3. GIFT city is considered to be the first Smart City of India. What is the estimated outlay for that? Do you think it will act as a model for other proposed smart cities also?
Ans. Clearly, the GIFT city promises to be among the most tech-savvy cities of the country. With white collar industries like financial services and IT based development being the mainstay of economic activity of this city, GIFT may well turn out to be the most affluent of all smart cities in the country. In the case of GIFT, given the fact that it will house international banks, stock exchanges and the financial services industry, its clientele would constitute white collared employees with standards and requirements. The government’s initiative to develop International Finance Services Centre (IFSC) in India under the SEZ route is a step towards realising India’s potential in international financial services (IFS). That GIFT is on its way to delivering on the huge expectations and promises it has made to investors is evident from the infrastructure already in place.
Not only that, the GIFT Project ensures 99.999% power reliability, which means outage of 5.3 minutes per annum. With so much going for the GIFT City, the country is poised to get a smart city of international standards, a model which the 99 other planned smart cities would strive to emulate. And with permissions and regulations too likely to start rolling in any time soon, it may not be long before India’s quest for an international financial services hub at par with Singapore, Dubai and London ends.
Q.4. Can you please highlight the core issues haunting realtors in Vadodara? What is Credai' inputs to the Govt to address the concerns of the sector?
Ans. The biggest bottleneck that Vadodara developers face today is a new policy implemented by government of deducting 40% of land in the non TP areas. This has come into effect since last 6 months and yet the guidelines for the same are not decided. Due to this void of deciding making in such situations, the development permissions are in a status of coma. It has also created lots of complications between the developers and the owners of the land.
CREDAI has approached government authorities with various proposals to create a win-win situation for both the government as well as the developers to achieve a target of providing houses to all at a reasonable price.
Q.5. What are the initiatives from the Govt to promote Affordable housing in the state?
Ans. Gujarat government has taken very aggressive steps to make maximum affordable houses by giving various incentives to developers like additional FSI, etc. The Government is also making houses in this sector; they have also bought into action new policies like Slum Rehabilitation Scheme, Mukyamantri Gruh Yojana, etc. CREDAI has also submitted proposals by which such affordable housings can be promoted and by giving incentives, as a result more and more real estate developers are getting attracted to this sector. I would conclude by saying that, thus the requirement of affordable housing can very well be achieved in 2022 if this current trend continues and as more and more developers join in to achieve this target, it seems that the dream may very well turn into a reality if right incentives are provided.