With an aim to provide affordable homes for all including economically weaker section, the government is actively considering granting of infrastructure status to the housing sector in the near future.
The matter is being taken up with the Finance Ministry and Reserve Bank of India and a favourable decision is likely to be announced in the coming Budget session, said a senior Housing and Urban Poverty Alleviation (HUPA) official today.
Besides, the ministry is also trying to provide income tax and service tax benefit to the sector, the official said.
Infrastructure status will boost the housing sector by providing easy access to funds and consequently increasing the availability of houses.
According to a recent report of the technical group on urban housing shortage, in 2012, there was a shortage of 18.78 million units and major shortfall of supply was in the economically weaker section (10.55 million units), followed by lower income group (7.41 million).
While the government cannot overcome the shortage of supply of its own, private developers are not finding it viable due to high cost of land and high interest rates.
Infrastructure status for the housing is a long pending demand of HUPA Ministry.
The official maintained infrastructure status for housing will increase the flow of funds to the sector which would encourage developers to come up with more affordable housing projects in India, therefore creating a balance in the demand and supply for housing.
Besides, the ministry is bringing the Real Estate (Regulation and Development) Bill, 2013, in Parliament. Once the Bill is passed it will pave the way for the setting up of the Real Estate Regulatory Authority, an industry watchdog that will keep a lease on land sharks and fly-by-night operators.
"There are certain changes in the draft of the Bill and it will be sent to Cabinet for its approval before introducing it in Parliament," said HUPA Minister Ajay Maken.
Ministry has received the suggestions from the real estate developers for certain changes in the draft.
According to the provision of the Bill, builders have to set up a separate escrow account to compulsorily deposit 70 per cent of the funds received from buyers and to ensure that these funds are used for that real estate project only.
Our aim is to bring transparency and accountability in the real estate sector, Maken said.
Once the regulatory authority is established the registration of real estate developers will be mandatory.
Funds collected from buyers for a particular housing project cannot be diverted to other project and the developer will be restricted in announcing new project before getting all mandatory clearances like environment, fire and others.