NEW DELHI: With the President making an ambitious announcement of “slum-free India in five years”, the housing ministry, which is finding it difficult to manage resources, has knocked the doors of finance minister Pranab Mukherjee. The ministry on Friday made a strong case for creation of Housing Mortgage Guarantee Fund with a corpus of about Rs 15,000 crore to broaden availability of loans for affordable housing.
The ministry is aware of the challenges with the country facing a shortage of around 2.60 crore houses, 98% in economically weaker section and low income group category. The ministry, which is aiming to attract private players to meet the massive housing shortage, is also keen that integrated township projects of 10 acres be put under Section 80-1A to ensure benefits as given to infrastructure sector.
But the proposal has come up with a rider as only integrated townships which will “reserve” 25% of the space (constructed area) for EWS and LIG can avail these benefits. At a time when realty sector is badly hit by economic slowdown, the ministry is using it as an opportunity to force the sector to go for affordable housing and make space for urban poor.
The ministry has also made a case for reintroduction of Section 80 I (B)10 of the Income Tax Act, under which a developer gets tax exemption on profit earned from sale of residential units below 1,500 sq ft. But, this time the ministry wants the benefits to be limited to only affordable housing projects — housing within 250 sq mt carpet area built and sold to EWS/LIG category. To ensure credit flow to EWS/LIG sector, where banks are reluctant to lend, the ministry is working to make the fund a component of the Rajiv Awas Yojana under which it will provide guaranteed loans of less than Rs 5 lakh to individuals by financial institutions.
Source:The Times of India