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Naredco urges central government to consider rental housing policy

The Minister of State for Housing and Urban Affairs Kaushal Kishore urged the construction and real estate sector not to underquote prices during tenders for housing and affordable housing projects.
The minister emphasized that the industry often engages in this malpractice to secure government contracts for both mega housing and affordable housing projects. However, this practice leads to problems such as incomplete projects and escalating costs towards the end.

Kishore explained that builders tend to quote around 15 percent less than the actual amount during the tender process. As completion nears, prices increase, leading to subcontracting issues that affect both builders and beneficiaries.

Kishore called upon the real estate industry to ensure that the surroundings of housing and affordable housing projects are made completely “dust, smoke, and intoxication” free. This, he said, will contribute to India’s development in line with the Prime Minister’s Vision for 2047, where India is projected to become a $30 billion economy.

The goal of completing 2 crore houses in the next 5 years for the poor and downtrodden should focus on quality and sustainability, aligning with the present government’s priorities. Approximately 4 crore houses in this segment have already been constructed in both urban and rural areas.

Secretary, Ministry of Housing and Urban Affairs, Manoj Joshi, said that critical reforms in urban planning are essential to achieve India’s goal of becoming a $30 trillion economy by 2047. Joshi suggested that, like the industry often seeks relaxation in corporate and capital gains tax, Naredco should offer pragmatic suggestions to achieve urban planning goals with a constructive approach. The Secretary Ministry of Housing and Urban Affairs also pointed out that the central government is encouraging all states to increase state property tax, as per the recommendation of the 15th Finance Commission. This move aims to incentivize state governments for housing and affordable housing projects.

Naredco urged the Union Government to consider “rental housing policy” as well as “National and State Master Plans” for construction and real estate sector. The twin purposes would enable India to smoothly move in the growth trajectory of construction sector as those who cannot afford to build their own houses can live in such units for good.

Chairman Naredco, Niranjan Hiranandani said that in developed country like USA, the rental housing policy is so successful that 50% of its populace prefers to live in in such utilities the occupant survives and if india begins preparation to adopt such a model it would be economic as well as prudent because those that cannot afford their own housing units can sustain their livings in rented properties.

Hiranandani said that Naredco has already mooted this idea with the Minister of Housing and Urban Affairs some time ago.

Naredco also demanded that the interest rates for the housing and affordable housing projects should come down from existing 8 to 9 percent to 6 and 6.5 percent as would happen a couple of years ago to boost housing activities. The interest rates have shot up due to multiple factors and if housing sector has to register a growth as being visualized by the current government reduction in interest rates would be the primary requirement.

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