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Developers apex body CREDAI has asked for an inclusive housing policy and setting up of a special housing zone in the upcoming Budget for 2013-14.
In its Budget wishlist, CREDAI said the government should initiate widespread tax incentives for making real estate the new growth engine of the economy.
Tax exemption should be allowed for small houses of under-60 sqmt of carpet area and creation of special housing zones with tax exemptions on the lines of SEZ for constructing 45 sqmt houses for low income groups and 30 sqmt houses for the economically weaker sections, CREDAI national president Lalit Kumar Jain said.
There is a shortage of about 18.1 million houses besides an incremental need of around another 10 million houses. “It is high time that the government took a pragmatic and practical look at the real estate sector today and take steps that help the industry in particular and the economy in general,” he said.
Real estate contributes as much as 5.5% to the GDP and together with the construction industry the share goes up to 11%. Over the last nine months credit to commercial real estate has gone down by more than 13% and priority lending to housing sector by 1.29%, he added.
Further, he said SEZ sunset should be extended by two years from 2014. External Commercial Borrowing (ECB) should be permitted as per the FDI norms and be allowed for housing financial institutions and even for all affordable housing and rental housing projects.
Besides, the government should launch tax free bonds for housing and make funds available at 5% for affordable housing projects as well as buyers under the segment.
