grow primarily because India has a housing shortage in all categories and therefore will have to play an important role over the next couple of decades at least. All our efforts should be to see that the sector grows, and grows healthily. With a fairly large middle class base with decent income levels that does not want to wait until retirement to move into their own home, I see, there will be good demand too.
How critical is the role of the government and regulations in the development of saleable land, building infrastructure around the land and pushing demand?
In the last decade, most of the development in the sector has been driven by private sector. From the government side, the incentives given have been under priority sector loaning thereby making more money available to the sector. Income tax rebate was given and FDI has been allowed. For the lower segment we had programmes such as JNNURM by which we gave some capital subsidy. Most of the states tried to make land available wherever it was to the real estate sector but the fact is that land is not available even with the state government and municipalities and so it has to be mobilised by developers, which they are doing.
The only intervention that government can do is to allow more optimal use of the available land by allowing higher FSI (floor space index), allowing them TDR (transfer of development rights facility, so that the gains can be maximised in the same parcel of land. That is one thing that will continue. As far as land acquisition is concerned, for affordable housing, the Land Acquisition Act is already very clear that it can be considered for such purposes but for non-affordable, it has to follow normal way of negotiation by the developers.
Do you see infrastructure development as a major constraint?
We understand that infrastructure is needed and is a challenge. If you are identifying land that is away from town then infrastructure facilities will have to be provided — most of the developers already factor that in. They pay external development charges, they tie