TNN | Nov 25, 2014, 06.39AM IST | Times of India

NEW DELHI: Urban development and housing minister M Venkaiah Naidu on Monday promised a turnaround in the real estate sector, impacted by the economic slowdown, by invoking Narendra Modi’s leadership. The government is considering tax breaks for affordable segment of housing, to give a fillip to the real estate sector and is expected to announce a subvention scheme on home loans for middle and lower income group housing.

“We need to relook at urban India and economic development, which will lead to advancement of India. We understand the contribution of our partners and we know that we cannot progress in achieving our Housing 2020 plan without support of the private sector,” Naidu said on Monday. Revival in the housing sector will also boost GDP growth, he added.

“The government believes in unleashing forces of growth through various sectors. The real estate sector contributes to 6% of the GDP and I am confident it will go up to at least 12-13% by 2022.” Addressing a conference of real estate developers, Naidu said, “housing sector has tremendous growth opportunities and it is the second largest employer in the country today.”

Citing Narendra Modi’s leadership, Naidu said, “3D Modi is the remedy for economic recovery and rapid growth will help people of the country fulfill their aspirations …Narendra Modi is dynamic, decisive and dares to think big and these three dimensions of the PM are making him hugely popular both within and outside the country.” Lalit Jain, chairman of real estate body Credai, said the government’s measures would help revive the real estate sector. Streamlining of approval processes will also provide a fillip, he added.

On the proposed Real Estate Regulatory Bill, Naidu said it won’t hit private investments and instead, would help them by seeking to enhance the credibility of the sector. The urban development ministry has put passage of the bill as its top priority during the current session of Parliament.

Sources said the real estate lobby is trying hard to push for dilution in two crucial clauses. First, to relax norm to reduce mandated escrow amount per project from 75% to 50% of investors’ money. As per the proposed bill, every developer must put 75% of investors’ money only for a particular project to restrict the practice of diverting buyers’ investment to launch fresh projects, rather than finishing current projects, for which they have already received payments.

Second, the developers are also seeking dilution of the norm, which proposes imprisonment for defaulting builders. “While the first relaxation that the realty players are seeking is ridiculous and government should not compromise on this, the second demand is convincing. There are other deterrent measures rather than putting people in jail,” said a realty expert, who did not wish to be named.

TOI has learnt that Naidu took a review meeting on Sunday and has asked officials to come out with a detailed presentation, specifying protection of consumers’ interests and the logical demands of real estate players.

Source : http://goo.gl/tCSzM2