The government is trying to provide the requisite stability to the economy, but now it also needs to focus on strengthening the real estate sector. This is important in view of the fact that the construction sector is the second-largest employer, next only to agriculture, and growth in the sector has a direct impact on ancillary industries like steel and cement. The sector creates a ripple effect in the market and helps push the economy.
Having said that, we strongly feel the need for setting up of a real estate regulator to ensure fair play and transparency in the industry and protect consumer interests. The main idea is to create a level playing field.
Also, with so much being talked about carbon emissions and concrete jungles, the way forward for the real estate industry is being environmentally conscious. Currently, the real estate sector contributes to more than 5 per cent of global carbon emissions. In order to address this issue, there is a need to encourage developers to build green and sustainable projects. Our government should provide appropriate subsidies to builders and help lower carbon emissions. On the other hand, the consumers should also be given reduction in stamp duty for opting for green development.
We also believe that integrated townships are the way forward for Indian developers, as it immensely helps to reduce the pressure on city infrastructure. The appeal of integrated townships lies in the fact that those put affordability, convenience, and focus on lifestyle in one very attractive package. Also, to meet the demand and need for facilitating MIG/LIG housing to decongest cities, there is a need to extend tax holiday under Section 80IB for integrated township development project as infrastructure project (development of township project with over 20 acres out of city limits with development of at least 50 per cent of the FSI area as affordable housing with area less than 950 sq ft). This Section gives tax relief to the builders for construction of integrated townships, thereby contributing to the development of infrastructure around the metros and Tier-I cities and reducing the demand and supply gap for affordable housing.
Some other initiatives that could benefit developers as well end consumers would be lowering & standardising stamp duty across the country, as well as reducing transaction burden. The introduction of unified taxation system across all states will also help incentivise more consumers for home ownership.
Brotin Banerjee
MD & CEO, Tata Housing
