Navin M Raheja, MD, Raheja Builders:

Real estate sector to be accorded infrastructure status given the critical role it plays in the infrastructure development.

The high lending rates of banks should further be reduced from the existing range of 14 – 16 per cent to 8 – 10 per cent. This will incentivise utilisation of credit for fuelling expansion plans of developers and revive the sector with adequate supply of affordable credit in the market. Home loan rates to reduce to 6 to 7 per cent to encourage end users.

Government must encourage and expedite the process of formation of the REMF’s/REIT’s in India. These instruments are time tested modes of efficient equity financing. Open external commercial borrowings should be allowed for large projects. The long term funds should be allowed to invest in housing finance companies.

Section 80-I-B should be restored under which the developers had the benefit of income-tax sops on the profits derived from investments.

Service tax on rentals to be done away with since it leads to double taxation (income/corporate tax plus service tax) and discourages investment in the sector, something which the government would do well to avoid at this stage.

Exhorbitant external development charges, license fees and other government levies to be rolled back. EDC charges in many states have on an average grown by over 50 per cent per annum, in addition to mind-boggling amounts coughed up by developers in the form of license fees for projects as well as other government levies. The government needs to seriously re-think on the hefty increases carried out in recent years and roll back these rates so that the sector can get breathing space and is able to revive.

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