The National Real Estate Development Council (Naredco) has appealed to Union Finance Minister Nirmala Sitharaman to continue with the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund by launching the second edition with a corpus of ₹50,000 crore.
In a pre-budget memorandum to the Finance Minister, the council also wanted budgetary support and relaxations including allowing input tax credit under GST and incentives for rental housing to achieve the housing for all target.
Noting that the SWAMIH fund has played a critical role and unlocked liquidity leading to renewed interest among investors, both foreign and domestic in the Indian real estate sector, the industry body has requested the government to create a second tranche of the SWAMIH fund.
While introducing the maiden fund in 2019, the government said the fund would provide priority debt financing for the completion of stalled housing projects that are in the affordable and middle-income housing sector.
As per industry estimates, in 2019, 90 per cent of the stalled projects were under the affordable and mid-income segment, constituting about 1,509 housing projects comprising approximately 4.58 lakh housing units in the stalled category.
Revival of stalled projects was expected to lead to early completion and timely possession of homes for home-buyers who have invested their hard-earned money.
“As the ultimate beneficiaries of the fund are the home buyers who have been able to take delivery of their long-stuck dream homes, an extension of the lending scheme would be a win-win scenario for both the industry and buyers,” G Hari Babu, President, NAREDCO, said.
The industry body reiterated its long-standing request for allowing the option of claiming input tax credit by residential project developers with higher GST. Stating that accounting processes, it said that the ITC would also help in enhancing compliance as it would encourage developers to reduce purchase from unregistered players.
“Due to three waves of Covid and subsequent lockdowns since two years and consequential impact on the economy, many tenants who were occupying offices and shops have either closed down or negotiated rentals and have paid zero or minimum rentals,” he pointed out.
“To incentivise rental housing in the country the tax burden on notional rental income should be exempted,” he felt.
The council also suggested several other taxation-related amendments including the removal of the ₹2 lakh limit of interest deduction under Section 24 of IT Act 1961 on housing loans to boost housing demand.
In a bid to help real estate projects get better liquidity and relaxations the industry body has also recommended MSME status to projects with the required parameters and also allowing priority sector lending for real estate projects.