Close X
Sunday, December 29, 2024
ADVT 
India

Indian realty industry looks to BJP to lift fortunes

Vinod Behl IANS, 09 Apr, 2014 02:18 PM
    The crisis-ridden real estate sector, feeling neglected by the United Progressive Alliance (UPA) government, is warming up to the Bharatiya Janata Party (BJP) and its prime ministerial candidate Narendra Modi to lift its fortunes. In the wake of economic instability, the realty industry has been facing severe stress with a clouded investment outlook. Its industry captains are looking forward to a strong and stable government that can put the battered economy back on rails and undertake the necessary reforms to revive the real estate sector.
     
    The apex body of real estate developers, the Confederation of Real Estate Developers Associations of India (CREDAI), has been quite critical of the UPA government's policies, and in denying the sector its rightful due. It laments that the real estate sector that contributes six percent to the country's gross domestic product (GDP) is also burdened with heavy taxes - it amounts to over 30 percent, with stamp duty alone amounting to Rs.32,000 crore ($5.3 billion).
     
    This, the association maintains, results in high property prices. It is also unhappy with the UPA government for not paying any heed to its appeals for drafting suitable policies that can contribute effectively to growth. Instead, it says, the UPA government gave a goby to the 11th Five Year Plan document that called for a focus on urbanisation through deregulation and the development of land to achieve the 9-10 percent growth target. Moreover, no action has been taken on crucial task committee reports on affordable housing, simplification of approval processes and rental housing.
     
    One of the most crucial reforms that has been hanging fire for the last several years pertains to the setting up of a real estate regulatory authority to safeguard the interests of property buyers by ensuring hassle-free, safe and transparent transactions.
     
    The apex association has charged the UPA government with framing a regulatory bill that, instead of being a facilitator, will result in an "inspector raj" as banking, planning, approval and environmental authorities were not under the purview of the bill. It believes that the bill can be used as a tool to achieve double-digit growth only if some issues like floor space ratio, online sanctioning, taxation and funding are brought under its purview.
     
    The BJP is sympathetic to these issues faced by the real estate sector and party president Rajnath Singh had extended support to the association at its recent conclave in New Delhi. The party is also in support of taking corrective measures to liberalise the commercial real estate funding business, which is highly skewed.
     
    It is a matter of concern that banks' exposure to the real estate sector is merely three percent in India, compared to 22 percent in China and 30 percent in the US. Even real estate investment trusts (REITs) that promise retail investors safe investment with regular returns and help developers raise funds without development risk have failed to take off in the past few years.
     
     
    During the tenure of the Atal Bihari Vajpayee government between 1998 and 2004, significant emphasis was given to real estate and infrastructure development. Enabling policy measures like low home loan rates, tax relief on home loans and the National Highway Development Project contributed significantly to the economy, with record job generation of 67 million, against the 2.7 million in the UPA regime from 2004-10, as per official data. India had also became a current account surplus country then.
     
    A broad and emphatic outline of the policies and reforms needed to put real estate and infrastructure development on the fast track is already given in a fair amount in BJP's manifesto for the Lok Sabha elections. It will be interesting to watch if the real estate sector can get "Modi-fied" in the coming months.

    MORE India ARTICLES

    Indian spacecraft Orbiter halfway to Mars

    Indian spacecraft Orbiter halfway to Mars
    India's maiden mission to Mars is on course, with its spacecraft Orbiter crossing the halfway mark on its voyage to the red planet, four months after it left Earth Dec 1.

    Indian spacecraft Orbiter halfway to Mars

    India Votes: Three-way battle in Delhi for over 12 mn voters

    India Votes: Three-way battle in Delhi for over 12 mn voters
    Over 12 million voters will Thursday decide the fate of three main political parties - the BJP, the Congress and the AAP - in Delhi's seven Lok Sabha constituencies.

    India Votes: Three-way battle in Delhi for over 12 mn voters

    Mamata's 'hate speech' against poll panel under scanner

    Mamata's 'hate speech' against poll panel under scanner
    The videos of West Bengal Chief Minister Mamata Banerjee's speech, where she had cast aspersions on the functioning of the poll panel, would be forwarded to the Election Commission in Delhi for scrutiny, the state's chief electoral officer Sunil Gupta said Wednesday.

    Mamata's 'hate speech' against poll panel under scanner

    Huge turnout in Lok Sabha polls in northeast India

    Huge turnout in Lok Sabha polls in northeast India
    India's four northeastern states witnessed brisk polling in the Lok Sabha election Wednesday, with Nagaland recording 82.5 percent voter turnout and Manipur as well as Arunachal Pradesh seeing around 70 percent balloting. Meghalaya saw almost two-thirds of its voters turn up.

    Huge turnout in Lok Sabha polls in northeast India

    Kejriwal meets attackers, asks police to catch masterminds

    Kejriwal meets attackers, asks police to catch masterminds
    AAP leader Arvind Kejriwal Wednesday reached out to the two men who had attacked him here, presenting them flowers, and told police to quickly trace the masterminds behind the twin attacks.

    Kejriwal meets attackers, asks police to catch masterminds

    Phase 2: Manipur, Nagaland head to polls Wednesday

    Phase 2: Manipur, Nagaland head to polls Wednesday
    Two northeastern states - Manipur and Nagaland - go to the polls Wednesday, marking the second phase of the staggered nine-phase elections in India

    Phase 2: Manipur, Nagaland head to polls Wednesday

    PrevNext