The Federation of Indian Chambers of Commerce and Industry (Ficci) has suggested a slew of measures to boost up the real estate sector and to bring back the consumer confidence.
Amit Mitra, secretary general, Ficci told FE, ?Our most remarkable attribute of construction industry is that it has large multiplier effect in terms of generation of employment and income as it is has both forward and backward linkages with around 280 associated industries?.
Ficci has said that there is a need to reinstate the definition of real estate business as contained in Foreign Exchange Management Act (FEMA). It will be clear that real-estate ?doesnot include the development of townships, construction of residential/commercial premises, roads or bridges?.
Development and construction should be considered as an integral part of urban infrastructure. This change would encourage banks and financial institutions to resume lending to the industry.
Apart from this, there should be an announcement of housing schemes by the development authorities such as latest housing scheme by the Delhi Development Authority (DDA) that offered houses at less than the market value. There should be an encouragement of the public-private partnerships (PPP) projects also on affordable housing to boost the investor’s confidence.
Ficci says that there should be a relaxation of the foreign direct investment regulations in the real estate in terms of the project criteria and allowing of the smaller projects to access capital as well, which means that smaller investments could also start coming into the country.
The external commercial borrowings should be allowed for construction funds with some restrictions in terms of average maturity. Apart form this, the corporate lendings at discounted rates for the housing projects should also be encouraged.
According to Ficci, the market size of the Indian real estate is estimated to be around $15 billion and it is the second largest employer, after agriculture, with about 25 billion construction workers in India.