Housing Policy, budget 2014

Till India completes its 75th year of its Independence, Prime Minister Narendra Modi has promised housing for all citizens. It is an ambitious plan, it will require budgetary as well as smooth coordination across multiple ministries.

To boost the country’s GDP there has to be a good correlation between housing & economic growth. In the last two years the GDP has grown at 5 per cent said Real estate lobby CREDAI.

They have come up with a suggestion that will help the government implement its promise given to the people.

  • The government should implement the reports of the two task forces on affordable housing and rental housing. These are low hanging fruits, it said.
  • Burden of taxes must be eased from housing sector. Housing faces a disproportionate incidence of taxes amounting to more than 35 percent of the cost of a completed unit. This can be partially alleviated by giving tax treatment of SEZs to affordable housing projects and providing benefits under Section 35 AD to the real estate sector. Increasing threshold limits of deduction on interest to Rs. 5 lakh on housing would provide incentive to the home owners. Subsidies must be targeted properly.
  • In the environment clearance for the housing sector investments worth Rs. 5lakh crore are stocked for approval.
  • Government must reduce the cost of borrowing for the housing sectors.

By accelerating investments and increasing employment, the higher growth in GDP would mean that these measures would enhance th tax base of the economy and be revenue positive even in the short run, CREDAI noted.