The real estate industry, which has been in the dejection for almost four years now, has been demanding regulatory and tax changes to shore up the demand and liquidity. Now, the government is discussing reforms to boost the stressed market.
The central government is readying a package to help boost exports and perk up the real estate sector.
According to senior government officials, the steps in real estate could include a task force to identify and revive stalled projects, easing of interest subvention norms, a new rental housing policy, an increase in the affordable housing category limit and reducing time taken to process applications under the partial guarantee scheme for housing.
In addition, there could be specific measures to make export credit easily accessible to small exporters.
Expediting work on the long-awaited goods and services tax (GST) e-wallet for exporters is yet another announcement expected soon.
While announcing the first set of measures last week, Finance Minister Nirmala Sitharaman had promised two more rounds to boost some of the stressed sectors, including real estate.
Officials said a package aimed at home buyers and real estate developers could come by the end of this week.
The real estate industry, which has been in the doldrums for almost four years now, has been demanding regulatory and tax changes to shore up the demand and liquidity.
Nirmala Sitharaman, along with Urban Development Minister Hardeep Puri and senior officials, had met representatives of the housing industry recently to discuss the status of the sector.
“There have been discussions on a task force for real estate similar to the one for infrastructure projects announced last week. The finance minister spoke about promoting rental housing sector. A new policy is in the works,” said an official privy to discussions.
The role of the task force will be to identify stalled projects, assess how much money is needed, and how much could be recovered.
It seems like, it is unclear whether this will be a new panel or whether the inter-ministerial task force being formed by the Department of Economic Affairs to finalise the pipeline of infrastructure projects will undertake the real estate work as well.
In the July 5 Budget speech, Sitharaman had said: “It is proposed that several reform measures would be taken up to promote rental housing. Current rental laws are archaic as they do not address the relationship between the lessor and the lessee realistically and fairly. A Model Tenancy Law will also be finalised and circulated to the states.”
Among other steps, a recent circular by the National Housing Board (NHB), prohibiting interest subvention for housing loans, is being looked at for a possible review.
Mostnoteworthy, Officials said prohibition could be eased for the affordable housing category at least. Sitharaman could also announce an increase in the affordable housing category in metro cities, which stands at Rs 45 lakh currently. The industry wants the affordable housing cap to be raised to Rs 1 crore.