Time to focus on Affordable Housing in Budget 2020-21

The last few budgets have taken many steps to stimulate affordable housing demand, however, despite the efforts, conversion of latent demand to actual sales have remained slow. Some urgent steps are therefore required under the domain of the upcoming Union Budget to provide a boost to the sector.

To begin with, the government can enhance the eligibility criteria for Credit Linked Subsidy Scheme (CLSS) and GST rate benefits to help a larger section of consumers in urban centres. The annual household income criteria across all consumer categories should be enhanced such that it is in sync with house prices in major urban markets like Mumbai and Delhi. The affordable housing price definition should also be enhanced for lower GST rate benefits to reach a larger segment of consumers.

Further, the availability of land is a major hurdle in the implementation of these projects. The central government needs to direct state governments (as land is a state subject) to start earmarking land parcels for this purpose and make them available for free/nominal costs to developers in order to bring down the input costs and make the prospect more attractive for developers. Also, these land parcels need to be equipped with basic infrastructure and utilities like road, water and power.

Mr. Pradeep Aggarwal, Chairman – ASSOCHAM National Council on Real Estate, Housing and Urban Development, Founder and Chairman – Signature Global India Pvt. Ltd. said, “All this will together make the affordable housing segment financially viable for the real estate players, thus fueling their participation which is needed for the fulfilment of national affordable housing goals to enter this segment and helps in achieving the ambitious “Housing for All” targets by 2022.”

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