This refers to the news report (October 15) on the package of measures to arrest industrial slowdown announced by the government. One important item in the package concerns the setting up of a group under the urban affairs ministry to step up government investment in housing. This suggestion is impractical. It is self-contradictory in terms of the recent measures proposed to be adopted by the central government to curb investments in housing by the private sector. It is well known that the government lacks funds to invest in housing.
The various measures which give incentive for investments in housing mainly under Sections 54 and 54F of the IT Act are in respect of exemptions regarding long-term capital gains. Unfortunately, the new Income-tax Bill, 1997 proposes to abolish these Sections to the detriment of the housing sector. Rather, a 6 per cent tax by way of TDS is proposed to be introduced in respect of any housing transaction sought to be registered.
I would appeal to the Prime Minister to look into this aspect and avoid self-contradictory decisions, namely, one wing of the central government i.e, the finance ministry abolishing the measures which give incentive to housing, and another trying to step up government investment in housing. Such double talk must be stopped in the interest of boosting housing activities in particular, and the economy in general.
