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NEW DELHI: PHD Chamber of Commerce and Industry has asked the government to allow real estate developers to avail benefits of an External commercial borrowings window to fund their low cost housing projects till interest rates in India come down.
“Opening up of the ECB route fully for the real estate sector is another major area which needs immediate attention since FDI can provide the much required liquidity into the sector but ECB would provide for low source funding to Indian developers and ease the liquidity pressure,” said Alok B Shriram, president of PHDCCI.
In a representation submitted to the union ministry of housing and urban poverty alleviation, the chamber also urged for infrastructure status to be granted for affordable housing as it will facilitate long-term funding through various channels which include ECBs and FDI.
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The chamber also sought relaxed norms for tax holidays for the sector under section 80-1A to encourage real estate development in the country, particularly for the economically weaker sections of the society.
In addition tax exemptions and reduction in developmental costs should be offered by the government to lure private developers for active participation in creation of housing stock, it said. Multiple approvals are currently needed for creation of low cost housing facilities as well as other real estate activities, the chamber said.
“This needs to be brought under a single-window mechanism so that approvals obtaining time is reduced to six months compared to the current practice of three years which increases the cost of construction”
While demand for housing has increased substantially over the years, supply of affordable housing has not kept pace. The gap between demand and supply of affordable housing can only be matched under Public Private Partnership where government draws up a mechanism to cross subsidies the land and construction costs, said the chamber. ‘The single largest driver of cost towards housing is land’
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