GOVT MUST MAKE POL­ICY COR­REC­TIONS TO SUP­PORT REALTY SEC­TOR: CREDAI

Financial Chronicle - - PLAN, POLICY - FC BU­REAU

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”.

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