REALTY SECTOR – REALTY SECTOR MISSED AN OPPORTUNITY

Parnab Kumar Mukharjee, Union Finance Minister has presented a Budget, for fiscal year 2010-11, that disappointed not many. The budget could not have come at more inappropriate time when UPA-II along with allies is feeling the heat of “bad governance”. Three issues were distinctly on the table when the Budget was presented how to tame the inflation, the escalating deficit figure and how to sustain the 9 percent GDP growth.

“To further stimulate growth in housing sector, I am liberalising the existing scheme of interest subvention of 1 percent on housing loans by extending it to housing loans up to Rs.15 lakh where the cost of the house does not exceed Rs.25 lakh from the present limit to Rs.10 lakh and 20 lakh respectively,” declared Parnab while presenting the budget proposals in the Parliament.

To pursue the UPA’s avidly adopted policy priorities, in regard to maintaining inclusive growth, the Finance Minister took housing sector as major concern. By affording 1% subvention on housing loans, the FM has exhibited his intents to make the dwelling places somewhat “cheap” to a class of people who fail to put their hands on luxury apartments.

“Actually, the global meltdown of economy has impacted the Realty Sector in India. The Realty Sector Players had to pass through a very tumultuous phase and the sector lost its steam. However, given the resilience of India economy, the realty sector recovered with in a period of one year,” said RN Yadav, a senior advocate and realty expert.

“As the realty sector has been taken to be an affective engine of economic growth in any country, Parnabda would have provided the sector with more appropriate stimulus. Actually, giving fresh heavy dose of stimulus would provide a major push to the sector. Still, the sector is catching up to realize the re-recession boom. FM has missed an opportunity to accelerate the pace of the realty sector and thus an overall growth trajectory in the country.

Finding the prices of residential properties rising in urban areas, FM has proposed to enhance the existing housing loan limit from Rs.20 lakh to Rs.25 lakh for dwelling units, “This step of the FM would neutralize the enhancing of prices of the housing units.

But then, the rural housing demands, particularly for vulnerable sections of the ruralite, FM has further enhanced the provision under Rural Housing Fund to Rs.3000 crore from the existing Rs.2,000 crore. To enable the economically weaker sections (EWS) and LIG household to seek loans, FM has proposed to initiate a mortgage risk guarantee fund under Rajiv Awas Yojna. This fund would assist the weaker sections to avail themselves with the loan facility and enhance their (loan) credit worthiness.

To prevent frauds and cheating in loan cases, FM has taken an effective step of setting up of central electronic registry under SAFRAESI Act, 2002. Some glaring cases of multiple advances provided by various banks on a single property, has prompted FM to put a check on such availability of loans with the connivance of banking employees.

Each year witnesses a requirement of approximately 200 million more dwelling units. To meet the requirement of the upcoming young generation, particularly of housing, the realty leaders on Pan India basis are desperately engaged in providing such a huge number of dwelling units.

Pranab Mukharjee’s attempt to give a boot to the realty sector, through falls short of the expectations, would go a long way in facilitating the availability of dwelling units to the weaker sections. He has also taken into consideration that no frauds are committed in seeking the loans. “I personally, congratulate FM for having given the realty sector a desired attention. Parnab’s priorities remain focused on the vulnerable sections of the society that has all the ingredients of realizing an inclusive growth. Actually, we find 300 million Indians below poverty line. They need to be given an opportunity to find dwelling places that would further facilitate to decrease the number of slums they have generated in the urban areas,” observed P. Jain

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