Budget 2018: Behind Government's Plan To Promote Affordable Housing

The Government has granted infrastructure status to affordable housing which will enable projects to avail lower borrowing rates and tax concessions.

Budget 2018 | | Updated: February 06, 2018 00:36 IST
Budget 2018: Behind Government's Plan To Promote Affordable Housing
Finance Minister Arun Jaitley presented Budget 2018 in Parliament on February 1. While the Budget was majorly focused on agriculture and health care, but provisions for the affordable housing sector were also announced. The real estate sector sees Union Budget 2018 as a balanced one with focus on affordable housing. In order to promote affordable housing, the government has made several efforts over the years to create enabling environment and eco-system. Here are some of those reforms  according to Hardeep Puri, Minister of State of Housing & Urban Affairs at exclusive institutional investor event.

The Government has granted infrastructure status to affordable housing which will enable these projects to avail the associated benefits such as lower borrowing rates, tax concessions and increased flow of foreign and private capital.

Real Estate (Regulation and Development) Act, 2016 (RERA), Real Estate Investment Trusts (REITs), higher tax breaks on home loans, the Goods and Services Tax (GST), land related reforms, optimizing development control rules, rationalizing of the stamp duty and registration charges, digitalization etc. have also been introduced.  These are expected to be effective in spurring the housing and construction activities, providing huge relief to real estate developers.

These reforms are also expected to attract private and foreign investments in the housing sector, having a positive multiplier effect on GDP and labor market.

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"We are aware that availability of encumbrance free land within existing municipal areas for urban housing schemes is not an easy task. Therefore, provision has been made to include rural areas falling within the notified   Planning/Development areas, under ambit of PMAY," Mr Puri said.

Based on demand assessment at the state level, the nation has the mammoth task of constructing about 12 million houses under EWS/LIG segment of the society in order to achieve the goal of housing for all, he added.
 

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