Government working on reforms to promote affordable housing

The Ministry of Housing and Urban Affairs plans to consult with state governments on issues hindering affordable housing projects, including clearances related to land acquisition and environment, the people cited above said on condition of anonymity. So far, the government’s effort was to boost demand by offering incentives including tax exemptions and credit-linked subsidies, one of the two officials said. He added that going forward, the Center will focus on creating a more conducive regulatory environment for affordable housing.

The government may also come up with a single-window clearance system to expedite the construction and delivery of projects across India.

Vikas Wadhawan, group chief financial officer, Housing.com, said if the process of land acquisition and permitting for low-cost housing is more efficient, it will help save both time and money for developers, which translate into additional cost benefits. will translate. home buyers.

“Apart from single-window clearance, another method that is being seen as a viable option to resolve land acquisition issues is through public-private-partnership route instead of outright purchase of land parcels. State governments can also help in this process by providing reduction or exemption in taxes like property tax,” Wadhawan said.

Questions emailed to the spokesperson for Housing and Urban Affairs on Wednesday morning remained unanswered till press time.

Land acquisition and project clearances are state subjects, with delays occurring at the local level. Lack of uniformity in rules leads to delays in projects. Developers have several times urged the Center to come up with a standard set of guidelines for the states and local administrations to remove hurdles in the evacuation process.

In her budget speech, Finance Minister Nirmala Sitharaman stressed on the need for faster approvals for affordable housing. “The central government will work with state governments to reduce the time required for all land and construction approvals to promote affordable housing for the middle class and economically weaker sections in urban areas. We will also work with financial sector regulators to reduce arbitrage costs as well as increase access to capital.”

The increased focus on improving the regulatory environment will be important as the window for some demand-boosting incentives, such as a credit-linked subsidy scheme for the middle-income group, and lower-income, and economically weaker sections, is eliminated. Will go on 31st March. tax benefits in addition to 1.5 lakh on interest paid on home loan for purchase of affordable homes also cannot be carried forward beyond the current financial year.

The government did not extend or announce any incentive scheme or tax benefits to boost demand in the affordable housing segment in the Union Budget for FY 2013. However, Finance Minister Nirmala Sitharaman allocated more amount 48,000 crore for the flagship Pradhan Mantri Awas Yojana (PMAY). The target will be to complete 80 lakh houses for 2022-23.

Till date, 5.5 million units have been completed under PMAY Urban, while 9.2 million low-cost houses are under construction, as against 11.4 million houses approved for FY22.