CREDAI Predicts Double Digit Increase in GDP Contribution by Emerging Cities of India
CREDAI, the apex body of real estate sector today hosted it’s second edition of the New India Summit in Mysore, Karnataka, designed to deliberate the growth of real estate sector in Tier II, III & IV cities, as a part of the vision of New India. Over 1000-member developers and experts from the real estate sector from across the country attended the two-day summit. The theme of the event entitled “Emerging Cities, India’s Future” & looks at the need for accelerated growth of tier II, III and IV towns in the face of enormous burden on the infrastructure in metro cities. CREDAI strongly believes that focusing on the Tier II, III & IV cities, will not only result in quality infrastructure and improved standards of living but also generate growth of employment opportunities in India’s vast hinterland.
CREDAI believes that the recent policy initiatives of the Government provide an extremely exciting opportunity for the real estate fraternity in emerging cities of India. With Hon’ble Prime Minister, Shri Narendra Modi’s ambitious project of “Housing for all by 2022” coupled with smart cities vision are the catalysts for the real estate industry and the economy generally. CREDAI comprehends the importance & significance of the role that realtors from smaller cities will play in the long-term growth of the industry and the economy as a whole. The apex body, in order to supplement this growth, aims to expand to 300 city chapters by 2019 with the primary expansion taking place in Tier II, III & IV cities.
Mysore, having made the list of 45 cities which has the potential to become a new mega city in the JLL – CREDAI report titled ‘The Dawn of India’s Future Cities’ at the inaugural New India Summit, played an ideal host owing to its strong cultural heritage and booming industrialization amidst thriving infrastructure projects and real estate potential.
At the annual event, CREDAI also stated a few policy centric recommendations to sustain the growth and development of the Indian Real Estate industry across the country;
Rationalization of GST
In view of real estate being subject to both GST and stamp duties, there is a case that the rate of GST on real estate which stands at 12%, needs to be reduced to 8% across all segments and not just for houses of up to 60 square meters. The current land abatement rate of 33% is also not adequate in case of metros where land costs up to 70 % of the total cost of the unit.
Single Window Implementation:
Lack of implementation of single window clearance in Indian realty is a major reason for delay in projects. It will resolve critical operational issues in the industry and could also reduce real estate prices substantially. While there has been improvement in tackling administrative roadblocks (also reflected in India’s enhanced ranking in the ‘dealing with construction permit’ category in the World Bank’s ease of doing business report), the implementation of the Single Window clearance will prove to be a game changer for the Indian Real Estate sector
Liquidity Crisis in Indian Real Estate
Demonetization, Real Estate Regulation Act and GST have cast the heavy burden of multiple transitions on the real estate sector. The NBFC Crisis has resulted in a liquidity crunch for the Indian real estate sector with even loans that have been sanctioned facing difficulties in disbursement. CREDAI recommends a one-time restructuring of all real estate loans to enable the sector to emerge successfully from the multiple transitions.
Last mile funding for stalled projects through setting up of Stressed Assets Reconstruction Fund for real estate has become a necessity to ensure delivery of housing units to consumers.
The summit was inaugurated by Hon, Union Minister of Skill Development & Entrepreneurship, Shri. Ananth Kumar Hegde. Spiritual leader Sri Sri Ravishankar also graced the occasion with his presence.
CREDAI President, Jaxay Shah, says “CREDAI’s New India Summit is a landmark platform, one of our many initiatives to encourage and stimulate growth in the emerging cities of India. With rapidly enhancing infrastructure, connectivity and technological advancements, CREDAI firmly believes that the future of the Indian economy lies in these very emerging regions, with Mysore being a testament to this belief owing to its rapid economic growth in the past few years.”
CREDAI Chairman, Getamber Anand, comments “There is no doubt about the need for new urban centers to take the mantle for India’s economic growth from the metro cities and put themselves on the map. CREDAI has worked tirelessly to ensure that emerging cities, with Mysore being one of them, are given the appropriate platform and foundation to prosper from. We hope and wish that our constant endeavors to propel the emerging cities to their next chapter of growth will provide a suitable blueprint for others to follow.”
CREDAI President-Elect, Mr. Satish Magar shares his remarks “CREDAI is delighted with the widespread acceptance and response we have garnered for New India Summit from industry stakeholders. This year’s summit in Mysore has built on the tremendous success of the inaugural event in Nagpur. CREDAI is now well on its path to enhance its focus and commitment towards the emerging cities of India, clearly reflected in our efforts to expand to 300 city chapters in 2019”