Rs 10,000 crore ambit for realty projects should be widened, demands FICCI

Currently, under the scheme announced in September, those under-construction projects which are not non-performing assets (NPAs) are eligible to get funds through the special window.

In its pre-Budget memorandum, the industry chamber noted that although the issue of liquidity crunch in the long-subdued real estate sector can help in addressing some part of the problem, economically viable projects only stuck due to absence of viable last-mile funding should be able to avail the fund.

“This funding is only available to non-NPA and non-NCLT projects. The current reality is that there are several real estate projects which might be currently NPA but are economically viable and only stuck due to absence of viable last-mile funding. It might therefore be more fruitful to include all economically viable projects under this scheme, irrespective of the current cash flow status,” FICCI said in its memorandum. It also said the liquidity and capital concerns of the developers need urgent redressal with the re-introduction of Input Tax Credit (ITC) for under-construction properties. While reducing the GST on under-construction properties to five per cent last year, the government had done away with the ITC given to the developers.

Asking the government for more emphasis on Real Estate Investment Trusts (REITS), FICCI said that despite government measures, only one REIT has been listed in the country so far.

“The government can further push the REIT agenda by reducing the timelines of investment from three years to one year for long-term capital gains taxation,” it said.

It also sought enhancement of tax incentives for home purchases and said, “unlimited interest on home loans for second homes which was available till 2016 can unfreeze the buyers’ strike which the sector is facing currently”.

On affordable housing, it suggested that the government can enhance the eligibility criteria for the Credit Linked Subsidy Scheme and GST rate benefits to help a larger section of consumers in urban centres. “For affordable housing, the annual household income criteria across all consumer categories should be enhanced such that it is in sync with house prices in major urban markets like Mumbai and Delhi,” it said.