Cabinet contemplating foreign direct investment in housing sector

“I am for FDI in the housing sector. The sub-committee which is examining the proposal has already met once,” he added.

He said the nod for NRI investment in the housing sector had been given in 1993, but the investment influx was `rather meagre’ at Rs 550 crores so far. “I now have a Rs 1,000 crore proposal from an NRI at Delhi itself,” he disclosed.

Referring to the recent repeal of the Urban Land Ceiling Act, he wanted the State Governments to follow suit and repeal their respective urban land ceiling laws toensure "liberation" of land and fall in land costs to facilitate major housing expansion.

“It only takes an assembly resolution to repeal the laws. Gujarat, Maharashtra and Andhra Pradesh have indicated that the Urban Land Ceiling laws would be repealed,” he added.

Jethamalani said a National slum development policy, envisaging clearing of slums and providing decent habitats to slum-dwellers in cities, using housing projects financed by the private sector, would be formulated within the next week or ten days.

Admitting that the centre had not been able to keep its commitment of constructing two million houses in one year, he said this was due to obstacles in the housing laws, which had to be removed. However, a majority of these housing projects had commenced and the government would strive hard to complete them soon and take up similar targets every successive year, he added.

He said the Union Budget had hiked the equity base for Housing and Urban Development Corporation (HUDCO) by Rs 473 crore toboost housing activities involving partnerships between HUDCO and private firms.

Asked whether he thought the housing sector needed a regulatory authority on the lines of those in power and telecom sectors, he said the idea of a regulatory mechanism was at the "proposal" stage. "I think it should not be a statutory authority and regulation can be done by an administrative body", he added.

Replying to a question, Jethmalani said with the housing sector receiving a boost, he expected rent control measures to become redundant. "Rent control was a product of wartime housing scarcity".

“I expect the state governments to take the lead and repeal the rent control laws. No future construction would have rent control in Delhi and some states, including Maharashtra have agreed to consider following suit,” he said.

To a question, HUDCO Chairman V Suresh, who was also present, said a number of State Governments, represented by officials at a seminar organised by HUDCO last week, wanted to restructure theirhousing boards on the lines of corporate firms.

Earlier, inaugurating a day-long CII-HUDCO seminar on urban infrastructure and housing, Jethmalani said the funds needed to fulfil the ninth Five Year Plan commitment of building 15 million urban housing units for the low income groups were estimated at Rs 150,000 crore. “This will have to come through private sector participation in a big way,” he added.