CREDAI embarks on the mission Clean India- Skilled India- Strong India
Delhi, November 24th 2014: The confederation of real estate developers association of India the apex body representing the real estate sector today organized the 9th CREDAI Conclave 2014 on the theme “Clean India- Skilled India- Strong India”, which is inspired by the vision of our beloved Prime Minister Shri Narendra Modi Ji and encompasses the mission of Swachh Bharat, development of 100 Smart Cities and Housing for all.
Speaking on the Occasion Mr. C Shekar Reddy, National President CREDAI said, “The Government who has recognized that housing is an important part of the economy contributing significantly to the GDP, being the largest employer after agriculture and having the strongest effect in acceleration of GDP growth through its backward and forward linkages to about 250 industries. It is recognized that the projected housing shortage of 30 million units by 2022 requires resources of the order of Rs. 22.50 Lakh Crores, which cannot be provided out of Government’s Budget. Accordingly, Committees have recommended measure to reduce the cost of land and finance for private developers and above all to simplify the cost of procedures which alone accounts for 35 to 40% of the cost of a dwelling 
unit. So far, however, there has been limited movement in actual terms. “
Speaking about Skill Development Mr. C Shekar Reddy added, “Real Estate sector is the 2ndlargest employer, however it still struggles from attracting the required manpower because of the hard labour required in real estate sector, no dignity of labour and lack of benefits from the government which are a norm in the organized sector. Working towards the mission Housing for all by 2022, it is imperative that a paradigm shift needs to be brought about in the manpower planning for the real estate sector. CREDAI has been actively engaged in building up the requisite skills in the construction sector at every level. At the national level, we are the stakeholders and the board members at National Skill Development Corporation and one of the promoter associations of Construction Skill Development Council. At the grass root level, we have an onsite training programme called Kushal at CREDAI Pune, which we hope to extend to other areas of the Country. Working towards the training needs of the Real Estate sector, we hope to set up an Institute for Housing and Real Estate Development which would be the first of its kind in the country and would indeed lay the foundations of achieving many of the objectives of the Government that are not possible to achieve by legislative means such as Real Estate (Regulation and Development) Bill. “
He further added that “The model of NSDC, which is a business model (pay & learn), may not work for the construction technicians. A suitable and a reasonably successful model has been adopted at National Academy of Construction in AP & Telangana where the trainees were provided free training, boarding and lodging, tool kit, uniforms, stipend at the rate of Rs 200 per day by utilizing the funds from the labour cess. Additionally if Construction Workers are made eligible for all benefits like any other employees in organized sector there will be a possibility to attract more people to take up the vocation and suffice the needs for the real estate industry. Providing housing/ transit shelters to the workforce would act as another incentive to work for the real estate sector. This can be funded from the labour cess and the unclaimed PF funds with the government which is estimated at around Rs.12000 Cr. lying unutilized.”
Speaking on the need for single window of approvals for the real estate sector Mr. Reddy said, “The other hurdle towards the mission Housing for all, is the large number of NOC’s required to take up the projects. The need of the hour is to simplify the process of approvals and improve the ease in doing business by removing the unnecessary NOC’s and introducing a simple online system of approval. The Real estate sector expects that the Civil Aviation ministry should earmark permissible heights of the projects on the digital master plan/ regional plan of the respective cities, which will eliminate the need for civil aviation NOC’s for individual projects. Another major difficulty of Housing Industry delay is the procedure followed by Ministry of Environment in issuing the NOC to every individual project above 20000 square meters. We suggest that this matter can be easily resolved if instead of individual projects, an environment clearance can be issued to the notified Master plan or the regional plan of the respective city with guidelines to the local bodies to be incorporated in individual permissions to all the projects undertaken in the notified areas.”
Raising the concern about Taxation Mr. Reddy said, “Housing is the only sector that attracts multiple (Service tax, VAT & registration charges) and double taxation with no input credit for registration charges. Presently the total tax to be paid is approximately 30-40%. We advocate that the Service Tax should not be charged as housing is a basic necessity & to achieve housing for all at least houses below 80 Sq mtrs should be exempted from Service Tax. We strongly recommend that the overall taxation on housing is brought down to 16-17% and the proposed GST should subsume registration charges also. This will facilitate housing for all. Moreover, for obtaining the Building Approval today the developer has to fill numerous forms and submit taxes, Duties, Cess etc under different heads. It is desired and needed to simplify the process of Taxation and introduce a single challan for the taxes to be paid by the developer, this simplification will help online payment of tax while obtaining online building Approvals and also minimize the revenue leakages.”
On the industry’s concern over the Funding Mr. Reddy added,”Availability of credit is the major concern which needs immediate attention. Easing of FDI norms, announcements for REIT’s are positive initiatives by the Government. The status of priority sector lending to the affordable housing segment (already announced by RBI for affordable housing) is a needed decision, yet to be implemented. The CRE lending by banks and financial institutions is about 3%. It should be at par with the global economies and funds to be provided at a lower rate of interest to make real estate sector the growth engine to the Indian economy. “
On development of Affordable Housing he said, “As per Housing and Poverty Alleviation (HuPa) the housing shortfall is 18.78 mn out of which more than 90% is in the EWS/LIG segment. Therefore we recommend that the units under the area of 40 sq mts are treated as national infrastructure. In this segment the private sector participation should be encouraged by providing approvals by empanelled consultants, issue completion certificates, allow automatic change of land use except in water bodies and recreational areas, all taxation, duties and cess should be exempted by local bodies, state and government of India. The government should provide the external social infrastructure to the areas to encourage adoption of these projects and achieve housing for all.”
He urged the government to do away with the Floor Space Index (FSI) concept like the policy of the government of Andhra Pradesh where though an order AP government has removed the concept of FSI thereby allowing the developers with unlimited FSI for the projects abetting wider roads and having bigger plots. By this simple initiative, even with higher land costs, the flats are working out to be less expensive making the houses affordable. He urged other states to do away with the FSI concept and help the home buyers.”
Mr. Reddy also urged Mr. Venkaiah Naidu on behalf of the housing sector that your ministry of Urban Development and Housing and Urban Poverty Allevation being the parent ministry, should act like the guardian and the voice of industry and homeless people to set up a ministerial coordination committee to help us with issues with other ministries like finance, commerce, environment, labour & skill development, etc. to expedite the reforms required to achieve the mission – Housing for all.”
Hon’ble Minister for UD and HuPA Sh. Venkaiah Naidu congratulated CREDAI for aligning itself with the national mission of Swachch Bharat , development of skills to make the youth more employable to make a strong India. He welcomed a PPP model for the development of 100 smart cities and housing for all. He also announced that the government will be coming up with a policy on interest rate subvention soon and will incorporate all the inputs from builders, consumers and other stake holders in the new Real Estate Regulation and Development bill.
Tags: CREDAI
