These measures include creation of a separate mortgage financial institution specifically to deal with secondary mortgage offering the fiscal concessions and bringing the securitisation under the concurrent list of the central government.

The debt securities floated by the mortgage corporation should either be free from stamp duty or attract lower stamp duty in order to provide level-playing field for investors.

In a report presented to the central government, the expert group has said that the company should act as an intermediary between primary lenders and investors of long term and fixed income securities by purchasing housing and other mortgage loans and issue debt securities to fund these purchases.

The committee has recommended that the funds received by the financial institutions from the sale of housing loans to corporation should be exempted fromstatutory reserves and liquidity ratio requirements lowering the the cost of funds to be better as compared to institutional deposits.

These deposits should be recognised as liquid assets by the Reserve Bank of India.

The fresh initiatives will not only create demand for securities but result in lowering of coupon rate of debt securities extended by the corporation, the report says.

The stamp duty on housing and industrial property loans should be exempted or lowered to one per cent as has been done in Maharashtra, Karnataka and Gujarat. These exemptions should be granted by the government for transactions with the corporation and dealings in its debt securities.

To eliminate delays in issue of the securities and prospectus, the corporation should be allowed to issue debt papers without prior approval from SEBI.

Similarly, the corporation should also be allowed by the RBI to borrow and lend funds in the inter bank market.

Criticising the government approach towards attracting flow of funds intothe housing sector, development of a secondary mortgage market and assets securitisation in the country, the report says that except discussion, no effective steps have been taken in the direction. The provision of recycling of finance for the housing was urgently needed.