Developers seek ‘stimulus package’ for housing industry

The developers of the state have sought a bailout for the realty industry from the government as the home prices remain unaffordable,despite economic slowdown.

Written by Express News Service | Mumbai | Published:February 10, 2009 2:06 am

The developers of the state have sought a bailout for the realty industry from the government as the home prices remain unaffordable,despite economic slowdown. The Maharashtra Chamber of Housing Industries (MCHI) has written to the state government asking for a set of 15 concessions that could be a part of the ‘stimulus package’ for the realty industry.

The letter states that buyers are reluctant to come forward due to Value Added Taxes (VAT),service tax,stamp duty registration and goes on to say that about 1.5 million construction labourers are likely to lose their jobs. The stimulus package,according to the letter,“will accelerate not only the construction industry,but 250 industries,that are directly or indirectly dependent on the housing industry.” Sunil Mantri,president-elect of the MCHI said the focus is on the common man.

“We have not asked for any direct benefits to the builder’s community. The State Bank of India brought down its home loan rates to 8% after the central government’s recent stimulus package for the housing sector. Similarly if state government allows the waiver on VAT,municipal taxes as we have suggested,developers will pass on the benefits to the end consumer,” said Mantri.

When asked whether this would lead to reduction of prices,Mantri clarified,“This has nothing to do with prices; prices will depend solely on demand and supply.”

Mantri added that the chief minister,who is in charge of the housing portfolio,has already agreed to most of the suggestions in-principle. The list of demands by MCHI include— reducing the area pf proposed townships from 100 acres to 25 acres,rebate on property tax  and more public private partnerships in the housing sector. Concerning sops on taxes paid by the developers,the MCHI has asked for removal of VAT,stamp duty on development agreement to be brought down by 1% from the existing 5% and halving of development charges,processing fees,plan sanction fees levied by BMC on developers.

Developers,who had earlier asked the government to offer them 0.33 FSI as the TDR rates are high,have now asked for the rates for 0.33 FSI to be reduced by 50% as the TDR rates have come down.

In regards to IT parks,after getting increased FSI and permission to allow financial and commercial institutions in such complexes,developers have now asked for various guarantees and deposits demanded for IT parks to be withdrawn.

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