Govt mulls 0.5% cess to fund cheaper housing ……………Mahendra Kumar Singh | TNN
The housing ministry is considering a proposal to impose a cess of 0.5% on all central taxes to establish a dedicated Shelter Fund to meet the ambitious target of affordable housing for all and to make India slum-free by 2020.
The ministry is also considering broadening the parameters of affordable housing to i nclude flats with a carpet area of up to 1,200 sq feet, which would
benefit lower and middle income groups.
benefit lower and middle income groups.
These recommendations are contained in a report of the high-powered task force on affordable housing, which submitted its findings to housing minister Kumari Selja on Monday. The panel, headed by HDFC chairman Deepak Parekh, suggested that the dedicated fund be managed by the National Housing Bank and that the government provide budgetary support of an equal amount to the fund.
The panel suggested that affordable housing be brought under the infrastructure definition and stamp duty rates and registration fees for such units be pegged at just 2% in all states.
New Delhi: Some of the recommendations made by the high-powered panel on affordable housing are clearly in the domain of states, but a populist push from the Centre will be hard to ignore ahead of general elections.
Panel moots raising MIG flat area to 1,200 sq ft
New Delhi: Some of the recommendations made by the high-powered panel on affordable housing are clearly in the domain of states, but a populist push from the Centre will be hard to ignore ahead of general elections.
While admitting that any attempt to fix a definition of affordable housing for a country as large and diverse as India, using the concept of onesize-fits-all, would be counter-productive, the panel has sought to redefine parameters. It said EWS/LIG flats could be those between 300-600 sq feet, up from the earlier 250 sq feet for EWS and 300-325 sq feet for LIG. It suggested enhancing MIG limit to carpet area of 1,200 sq feet, up from 650 sq feet.
The task force estimated that alleviating the urban housing shortage could raise the rate of GDP growth by at least 1-1.5% and have a huge impact on improving the quality of life. The panel urged permitting housing finance institutions (HFIs) to access long-term external commercial borrowing market, considering the HFIs required long-term funding sources at low cost to pass on benefits to the ultimate borrowers.
The panel recommended that funds raised through sale of land by state housing boards must be ring fenced, with a defined proportion to be redeployed only for affordable housing.
In an effort to bridge the housing gap for lower and middle income groups, the panel suggested reinstating income tax deduction under section 80 (1)B of the IT Act which was available in respect of exempting 100% profit from building residential projects for LIG/MIG houses may be restored for two years.
The task force suggested establishing a housing finance company focusing only on micro-finance loans and to promote household savings in the informal sector to enable a down payment for a loan.
The panel recommended upward revision in the FAR/FSI.