Aiming to facilitate affordable housing in the country, Assocham has suggested measures like grant of infrastructure status to housing sector, digitisation of land records, easing of norms for FDI in real estate and allowing insurance and pension funds to invest in the sector.
"Given the slowdown in the real estate sector, additional High Net Worth Individual (HNI) investments in the sector at high interest costs and the increase in ready reckoner rates by some state governments, will only push up property prices further".
"Taking adequate and appropriate measures to increase affordable housing alternatives will not only create a GDP multiplier, but also improve the living standards of Indian citizens," Assocham President Rana Kapoor said.
The country currently requires 18.78 million additional houses, of which 95.62 per cent are in the Economically Weaker Section (EWS) Lower Income Group (LIG) / Middle Income Group (MIG), Assocham said.
The industry chamber said grant of infrastructure status to the housing sector will help attract higher capital. It advocated relaxation in the conditions for foreign direct investment (FDI) in real estate and reduction in minimum capital requirement from USD 10 million to USD 5 million and minimum tenure before repatriation from 3 years to 1 year.
Assocham also suggested a review of Section 43C in the Income Tax Act on taxation at circle rate and tax exemption on income derived by an undertaking, engaged in development and construction of smaller dwelling units.
Beside, it called for review of RBI norms for project finance and uniformity in the end-user income ceiling norms for affordable housing units for EWS and LIG segments.
In the long term, the government must rationalise direct and indirect taxes in the real estate sector to enable competitive pricing for the end user, along with initiating single window approval mechanism for housing sector, it said.