GOVT MUST MAKE POLICY CORRECTIONS TO SUPPORT REALTY SECTOR: CREDAI
THE real estate industry apex body, CREDAI said the government has to make a few policy corrections to support and sustain the growth and development of realty sector across the country.
In view of real estate being subject to both GST and stamp duties, the rate of GST on real estate which stands at 12 per cent, needs to be reduced to 8 per cent across all segments and not just for houses of up to 60 square meters, said CREDAI in its list of recommendations.
In terms of rationalization of GST, the apex body said, current land abatement rate of 33 per cent was not adequate in case of metros where land costs up to 70 per cent of the total cost of the unit.
The apex body also pressed for a single window clearance system and it said lack of a proper agency in the realty sector was the key reason for delay in projects. A single window system would be able to resolve critical operational issues in the industry and could also reduce real estate prices substantially. While there has been improvement in tackling administrative delays, the implementation of the single window clearance will prove to be a game changer for the Indian real estate sector, it added.
At a two-day annual summit concluded in the royal city on Thursday CREDAI said, demonetization, real estate regulation act and GST have cast the heavy burden of multiple transitions on the real estate sector. The NBFC crisis has resulted in a liquidity crunch for the Indian real estate sector with even loans that have been sanctioned facing difficulties in disbursement. Under this context, CREDAI also recommended a one-time restructuring of all real estate loans to enable the sector to emerge successfully from the multiple transitions.
It said formation of stressed assets reconstruction fund is critical to facilitate last mile funding for stalled projects and to ensure timely delivery.
The apex body is planning to open 300 city chapters by 2019 with the primary expansion taking place in Tier II, III & IV cities.
Over 1000-member developers and experts from the real estate sector from across the country attended the summit whose theme was “Emerging Cities, India’s Future”.
CREDAI president, Jaxay Shah said, “With rapidly enhancing infrastructure, connectivity and technological advancements, we firmly believes that the future of the Indian economy lies in its emerging regions”.