Push for lower stamp duty to curb black money in real estate: Niti Aayog asks Centre

 Niti Aayog has suggested that the Centre should work with states to lower stamp duties and also expedite release of land caught in litigation due to archaic urban land ceiling act to check black money in real estate sector and make housing affordable.

The government think-tank recommended providing monetary or non-monetary compensation in case of revenue loss to the states due to a reduction in stamp duty.

In its three-year action plan, the Aayog highlighted that a key factor contributing to inflated land prices has been the flow of illicit money into real estate.

“Therefore, attacking black money would have the important beneficial side effect of bringing land prices down and making housing more affordable for low-income families,” said the plan, adding that one important factor encouraging the flow of black money into the land is high stamp duty.

“Working with states to lower this duty would help bring land prices down,” it said.

“Lowering the stamp duty for real estate sales at the state level will limit incentives to carry out transactions using unaccounted wealth,” the plan said, adding that in the long run, lower stamp duties will help create a more efficient property market.

The Aayog argued that in states where the stamp duty is very high, revenues are likely to rise because the decline in the duty would discourage buyers from under-declaring the value of the transactions.

The lower duty would also encourage buyers who are otherwise deterred from entering the market which would work towards raising revenue, it said.

The Aayog said, “…We need to provide monetary or non-monetary compensation in case of revenue loss in the wake of a reduction in the stamp duty.”

The plan said Gujarat successfully lowered its stamp duty to 3.5 % from about 5%, with increased revenue from other sources making up the lost revenue from the reduction.

The Aayog said urban land ceiling act has contributed to keeping urban property prices artificially high as large chunks of vacant land have disappeared from urban land markets.

“Although most states have now repealed this act, many large pieces of land remain tied up in litigation. Releasing this land for commercial use should be a priority,” it said.

Unused land under the purview of central or state governments and sick PSEs, complex land conversion rules and high compensation for land under the Land Acquisition Act, 2013 restrict the supply of land in urban areas which is a key constraint for real estate development in cities.

Source-ET Realty

Indian Air Force-owned Hindon Airport to become second airport in Delhi NCR

NEW DELHI: The Indian Air Force-owned Hindon airbase in Ghaziabad would become the second airport in the National Capital Region of Delhi albeit for regional commercial flights, the government said on Wednesday.

The government said that they have fetched approvals from the Indian Air Force to allow regional airlines to launch flights out of Hindon airbase instead of the existing Delhi airport, as it is not constrained.

“We will not be able to add any new regional flights out of Mumbai airport because there are no slots available. Not just that Delhi airport is also facing slot constraints. We will soon be offering Hindon airbase in Ghaziabad for regional flights,” said aviation secretary RN Choubey.

He added that the ministry will talk to Delhi airport for their approval for the usage of another airport within 150 km radius of the existing Delhi airport.

“We have started discussion with Delhi airport management on this and are hopeful that they would not have any problem in starting regional flights from Hindon,” Choubey added.

Source- ET Realty

Yamuna Expressway authority to hand over possession of 3,000 affordable homes

GREATER NOIDA: Yamuna Expressway Industrial Development Authority (YEIDA) on Tuesday said that it would hand over possession of 2970 flats in its affordable group housing plan located in sector 22D of the YEIDA area. The authority has built a total of 5100 flats for middle and low income groups. These residential flats have also received a ‘green’ certification from the Indian Green Building Council.

According to officials, the multi-storey flats were launched through two different schemes in 2013-14. “Allottees will be able to take over the possession of the flats and register their property within 60 days,” said Shailender Bhatia, Officer on Special Duty, (OSD), YEIDA. “The owners of rest of the flats will also be handed over the possession in a phased manner,” he said.

Officials further said that the flats are ready for living. These affordable homes were designed in a way so as to cater to all sections of society. Plots size of flats is 30 sq m each. “The multi-storied apartments, which also have stilt parking facilities, were sold at an affordable rate of Rs 7.5 lakh per unit for 1BHK, officials said.

“They are environment-friendly affordable homes,” said Arun Vir Singh, CEO, YEIDA. “These homes will promote health, conserve natural resources, provide easy access to services and save residents hundreds of rupees a year in energy costs,” he said.


Source- ET Realty

Govt sanctions over 2.17 lakh houses for urban poor

NEW DELHI: The government has sanctioned over 2.17 lakh houses for urban poor in six states, including Andhra Pradesh, Uttar Pradesh and Assam, taking the total tally to about 26 lakh under the Centre's housing scheme.

An official release today said in the latest sanctions, Housing and Urban Affairs Ministry has given nod to over 1.20 lakh more houses under Pradhan Mantri Awas Yojana (Urban) to Andhra Pradesh, followed by Uttar Pradesh 41,173, Assam 16,700, Gujarat 15,222, Jharkhand 14,017 and Maharashtra 9,894.

With this, the total houses sanctioned under the scheme increased to over 26.13 lakh with a total investment of around Rs 1.39 lakh crore. Central assistance of Rs 40,597 crore has been approved for construction of these houses.

The 10 states--Andhra Pradesh, Tamil Nadu, Madhya Pradesh, Karnataka, Gujarat, West Bengal, Maharashtra, Uttar Pradesh, Jharkhand and Bihar--account for 82 per cent of the total houses sanctioned so far under PMAY(U).

Andhra Pradesh was far ahead of other states, accounting for 20.71 per cent of the total sanctioned houses.

With the latest sanctions, all states and Union Territories, except Delhi, Chandigarh, Goa and Lakshadweep, have got houses sanctioned under PMAY(U).

Source- ET Realty

Centre to invite global expertise for housing scheme

                                                                                             Delhi/NCR

The Centre will invite companies from across the world to showcase their construction techniques, and adopt the selected ones to build affordable houses for poor families in the country, a top official said on August 26.

The move is in line with the government's push under the 'Pradhan Mantri Awas Yojana' (PMAY) (Urban) project, which aims at providing 'pucca' houses to every poor family in the country by 2022.

At present, there is a shortage of 1.2 crore houses in urban areas, Housing and Urban Affairs Secretary D S Mishra told reporters here.

"It is possible to complete housing projects, which normally takes 2-3 years, within 90 days with the help of technology. We want to get such technology in India. We will conduct a affordable housing construction technology challenge," he said.

The firms from across the world would be invited to demonstrate their technology to build houses at "minimum cost and in minimum duration" by using local material and adhering to our building norms, he added.

The technology provider will have to partner with local firm-either private or public-and will be provided land at six to eight place across the country where they will demonstrate their construction skills.

The move is in line with Prime Minister Narendra Modi direction to adopt technologies to build houses faster and at cheaper cost, Mishra said, adding the initiative will also attract private builders to participate in the affordable housing sector.

"In 18 months or so, we will have certain technologies in the country that will construct houses in shorter span of time," he said, adding that the Ministry is preparing a framework of the challenge.

It also organised a "round-table meeting" on 'India Housing Construction Technology Challenge (IHCTC)' here which saw participation from various stakeholders.

Addressing the event, Niti Aayog CEO Amitabh Kant pitched for use of technology in the affordable housing sector to bring down the duration of construction.

"You cannot do affordable housing if you are constructing them in three years. Rate of interest is so high that it will never be affordable. The affordable house need to be constructed in three to four months and that is possible with the help of technology," he said.

Stressing that there will be greater urbanisation in the next four to five decades in India than the last 5,000 years, Kant advocated for "innovative and sustainable urbanisation" as the country India faces various challenges like scarcity of land, gas and water.

"We need to have extremely sustainable and innovative urbanisation which should become model for the rest of the world...there are two challenges -- how do we use technology and compress the speed of construction," he said.

The government has set an ambitious target of constructing 12 lakh houses under PMAY (Urban) in the 2017-18 period, out of which only 1.49 lakh houses were built in 2016, a senior government had said earlier.

The Centre seeks to construct 26 lakh houses in 2018-19, 26 lakh in 2019-20, 30 lakh in 2020-21 and 29.80 lakh in the 2021-22 period, the official said.

Source: Economic Times, Delhi/NCR

Centre wants states to follow RERA in spirit

Taking a cue from a parliamentary committee that pulled up state governments, particularly those in Uttar Pradesh, Haryana and Gujarat, for diluting key provisions of the Real Estate (Regulation and Development) Act, the Ministry of Housing and Urban Affairs has asked the states to amend or formulate rules of the Act in consonance with the spirit of the central Act. “Right from the beginning, we have been telling all the states not to dilute the Act. It is good that even the parliamentary committee thinks the same and now our hands will be further strengthened,” a senior government official said.

In a report tabled in Parliament earlier this month, the committee on subordinate legislation, headed by BJP MP Dilipkumar Mansukhlal Gandhi, has asked the state governments to take all possible remedial measures to ensure that ongoing projects are brought under the ambit of the Act so as to extend the stipulated benefits of the RERA to home buyers. The committee has directed the ministry to ask the state governments to amend or formulate the rules under RERA in such a way that there is no ambiguity regarding the definition of “ongoing projects.”

Haryana and Uttar Pradesh have decided to keep outside the purview of the RERA projects that have been issued or applied for, occupancy certificates. This is a significant difference from the central RERA notified on May 1 this year that had completion certificates as the benchmark for exemption. Gujarat has diluted the key provision regarding punishment to developers for non-compliance. “In Uttar Pradesh, about 80-85% of the total projects are getting registered…We are not satisfied with what Haryana has done,” the official said. The Act came into force on May 1, 2017. So far 25 states have notified rules.

Source- Financial Express

Banks should link home loan rates to repo rate: RBI appointed committee

A Reserve Bank of India appointed committee on Household Finance has suggested that banks link their home loan rates to the RBI's repo rate, the rate at which it lends to banks, instead of the Marginal Cost of Funds based Lending Rate (MCLR), which the banks follow now.

"Banks should quote loans to customers using the RBI repo rate rather than based on their own MCLR rates," the committee report chaired by Dr Tarun Ramadorai, Professor of Financial Economics, University of Oxford suggests. "To facilitate ease of comparison for prospective borrowers at the point of purchase, every floating-rate home loan should be quoted to prospective borrowers in the form of a market-wide standardised rate + spread as opposed to MCLR + spread."

While these recommendations need not be accepted by the regulator, it comes when the RBI had hinted it was unhappy with the rate transmission under the MCLR regime. In the past three years the central bank has reduced the policy rate by 200 basis points, but the weighted average lending rates have fallen by 145 basis points. A basis point is 0.01 percentage point.

"The experience with the marginal cost of funds based lending rate or MCLR system introduced in April 2016 for improving monetary transmission has not been entirely satisfactory even though it has been an advance over the earlier base rate system," Viral Acharya, deputy governor RBI had said on August 2. "We have constituted an internal study group across several clusters to study various aspects of the MCLR system and to explore whether linking of the bank lending rates could be made direct to market determined benchmarks going forward. The group will submit the report by September 24th, 2017."

The committee has also recommended that all banks use the same reset period of one month for loans. Under the current system, floating rate loans have a fixation period of roughly one year. The report argues that the current system impedes monetary transmission mechanism and does not allow borrowers to immediately benefit from interest rate drops.

"If the bank decides to link home loans to the one-year MCLR, it should pass through any changes in the one-year MCLR rate to borrowers every month," the report says. “And if the bank decides to link home loans to the six-month MCLR, it should pass through any changes in the six-month MCLR rate to borrowers every month.

Source- ET Realty

Govt reduces GST on work deals for affordable homes

The government has reduced GST rate on work contracts for affordable housing to 12% from 18% fixed earlier. But it is unlikely to have any impact on prices of affordable housing for buyers, industry experts said as GST rate for buyers to purchase a finished house remains at 12%.

In a notification issued on Tuesday, the government said GST on composite supply of work contracts for affordable housing up to carpet area of 60 sq metre in a project approved by a competent authority will be 12%, including the state GST.

CREDAI president Jaxay Shah said the new rate is only for work contractors. If a developer involves a work contractor for his project, his cost will be reduced by 6%. But in the affordable segment, developers construct projects themselves to be cost-efficient. Therefore, the cost for developers will remain the same.

And on top of that, buyers will continue to pay GST at 12% on affordable housings. Of course, he will get the credit for taxes paid on inputs.

In GST regime, when a developer sells a house to an enduser, GST will be calculated at 18% on the two- third value of the house. The net rate would be 12% of total price of the house. The abatement of one-third of the value of the house is given to adjust the land price, which neither comes under goods or nor services category.

Source- ET Realty

Govt panel on hiccups in Noida’s exit policy for builders

GREATER NOIDA: The state government has formed a committee, headed by Greater Noida Authority chairperson Rahul Bhatnagar, to deal with issues related to the Uttar Pradesh's Project Settlement Policy (PSP).

The move comes following the Noida Authority's proposal in July 2017 to extend the deadline for builders, opting for the policy, to submit their applications. Earlier, the deadline was June 15.

The committee also includes CEOs of Noida, Greater Noida and Yamuna Expressway authorities as its members.

According to officials, an order dated August 14, 2017, from UP principal secretary(industries) Alok Sinha has been circulated in the three authorities. "This committee will examine all issues related with the PSP, including extension of the policy date, amendments to the policy, if any, etc.," said Debashish Panda, CEO, Greater Noida Authority.

"Also, reducing the upfront payment plan, part surrender of land, financial plan for co-developers, forfeiture in a part land surrender deal and all such matters — which need clarification by builders participating in the PSP — will be addressed by the committee," Panda explained.

The UP government had approved this policy on December 15, 2016, to resolve multiple issues faced by builders and homebuyers. It is aimed at helping thousands of buyers get possession of their homes, besides allowing the three authorities to recover their land dues amounting to nearly Rs 30,000 crore.

While some realtors under the PSP have opted to return the land and exit from projects that have been stuck for long, some have opted for a rescheduled payment plan by paying 25% of their outstanding dues. Many others have come up with a co-developer who would help them finish their incomplete projects.

"Under the part land surrender plan, many clarifications have been sought regarding legal rights of co-developers, forfeiture of land and penal interest," said the CEO. "Each issue will be examined in details before arriving at a conclusion. Each clarification has to be submitted to the government in two weeks, i.e. by August 28," he added.

Source- TOI

Union govt to double Metro network in 18 months, add 4 new cities on map

NEW DELHI: In a major fillip to urban transport, the Union government is all set to double the metro rail network over the next 18 months, adding four new cities to the metro map. The biggest gainers would be cities in BJP-ruled states, viz. Lucknow, Ahmedabad and Nagpur. Lucknow Metro would be the first off the block as it has received safety clearance and would be inaugurated within this month.

Election-bound Gujarat would get its first 6.3 km stretch in the capital city Ahmedabad next month. These two stretches would be followed by 28.4 km stretch in Delhi and 28 km in Hyderabad in September.

By March 2019, just two months ahead of parliamentary elections, 19 new sections in nine cities would be commissioned, adding 313 kms to the 370-km metro network. This translates to 313 kms made operational in 19 months as compared to 370 kms made operational over 33 years in eight cities since the first metro service began in Kolkata in 1984.

This is expected to be a major election pitch in urban centres. A senior ministry of housing and urban affairs official told ET, “Our cities are grappling with traffic jams and people are spending a lot of time on the roads. At such a time an expansion of comfortable metro network comes as a fillip to public transport. This has been aided by an increase in budgetary provision for metro rail projects.”



As per statistics provided by ministry of housing and urban affairs (MHUA), there has been a 158%hike in budgetary provision for metro projects during the last three years over the previous three years under Congress-led UPA government.

The budgetary provision between 2012 and 2015 for metro projects was Rs 16,565 cr, which has been increased to Rs 42,696 crore during 2015-18. At present, metro services are available in Delhi (217 kms), Bengaluru (42.3 kms), Kolkata (27.39 kms), Chennai (27.36 kms), Jaipur (9 kms), Kochi (13.3 kms), Mumbai Metro Line 1 (11.4 kms), Mumbai Mono Rail Phase 1 (9 kms) and Gurugram Rapid Metro (11.60 kms).

 

Source- Economic Times

 NewsletterA A