Tuesday, 29th September 2015, FICCI, Federation House, New Delhi
Mr. Navin M. Raheja, Chairman, FICCI Real Estate Committee welcomed members to the first meeting of reconstituted committee for 2015. He highlighted the need to bring a change in perception of real estate industry and the importance of Real Estate Regulation Bill for growth of the sector. He further highlighted the issues involved in seeking regulatory clearances for projects due to which 50 per cent of time and money is spent seeking unwanted and duplicative approvals. He informed the committee that real estate market is very tight in India due to squeeze of capital flow into the sector.
Chairman also highlighted the issue of higher incidence of taxation on real estate and rising costs of real estate due to expenses incurred towards Stamp Duty, License Fees, External Development Charges (EDC), Infrastructure Development Charges (IDC), Employees Provident Fund (EPF), Employees' State Insurance (ESI), and Environment Clearance. The Chairman suggested to EY to consider conducting a cost benefit analysis study on Goods and Services Tax (GST) for real estate in a month’s time. He also informed that industry can come together to fund this study report.
Chairman invited members to take responsibility to undertake important issues on real estate. Following issues were discussed in the meeting:
- Housing for all
- Land Pooling
- Slum Redevelopment
- FDI in real estate
- Incidence of taxation on real estate
- Goods and Services Tax (GST) for real estate
- Simplifying real estate approvals
- Skill Development in real estate
- Bringing down cost of construction
Chairman suggested that FICCI should form working groups on above issues facing real estate sector.
In a big boost for the markets and economy the Reserve Bank of India (RBI) on Tuesday cut its policy rate by a more-than-expected 50 basis points to a four-year low of 6.75%. The revision in the REPO rate will positively impact the sentiments surrounding the real estate market. Banks will now be able to offer loans at more attractive rates specially when the festive season is around the corner. Cheaper loans for home buyers may gradually raise the interest in residential property purchase from end users and investors. It is also going to benefit old home loan borrowers as well as the cost of funding for real estate developers should also reduce marginally.