Real estate sector sees focus on affordable housing

Real Estate sector sees focus on affordable housing. The new scheme that the President announced was the Rajiv Awaaz Yojna. Sources said, this will be very big scheme, will require a corpus of over Rs 50,000 crore as the minimum. CNBC-TV18’s Nayantara Rai reports.

Here is a verbatim transcript of Nayantara Rai’s comments on CNBC-TV18. Also watch the accompanying video.

Let’s not forget in the Presidential address the UPA government did promise a slum free India in five years that’s a very ambitious target. Therefore we are expecting that in this budget affordable housing will be given a big focus.

The new scheme that the President announced was the Rajiv Awaaz Yojna . We are hearing from sources that this will be very big scheme, will require a corpus of over Rs 50,000 crore as the minimum. But in this budget we could see an allocation of anything between Rs 5,000-10,000 crore. This allocation will be for implementation of the project as well as interest subsidy.

What we need to understand how this model will work and it is for illegal colonies as well as for slum areas in urban areas. The state should transfer land to woman beneficiary, so women will be given priority and part of the vacated slum as well as illegal colony can be used for commercial developments. So that will help cross subsidising the entire scheme and this also means that we could see public-private partnership. But lets not forget that real estate is a state subject, so it will be up to every state on how it will want to take this up.

We also need to understand that this scheme will cause between Rs 5-7 lakh and the minimum carpet area will be 250 sq. ft. So a lot of these principals are already there in the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). We need to understand from our sources in the Urban Development Ministry that the Ministry has asked for a second phase of JNNURM again over a period of seven years, so that could be the second phase of JNNURM that we might see. The real estate developers have of course asked for an industry status, so we will have to wait and see. The other one is tax breaks under section 80 IB that real estate developers were expecting to be expanded when Mr. Chidambaram presented his last budget and this did not happen, so they will of course be watching for that one.