LEADER OF YOUNG INDIA
The youngest Chairman of CREDAI, Jaxay Shah, Managing Director- Savvy Infrastructure Pvt. Ltd. feels proud to be leading the credibility narrative of CREDAI in its 20th year and is upbeat about the young generation of developers.
HOW DO YOU FEEL THE YOUNG GENERATION OF REAL ESTATE PROFESSIONAL WILL TRANSFORM THE SECTOR?
About 51% of our country comprises of youth and their role in transforming each and every industry – including real estate can’t be undermined. Fortunately, I have engaged with various young developers and know many of them, closely. They are not only bringing new ideas but a rare ‘enthusiasm’ in everything they do along with this sense of social awareness and responsibility which is at the heart of all CREDAI’s efforts.
We have formed CREDAI Youth Wing to bring together the next generation of real estate developers who are working towards developing the housing ecosystem in tier-2 and 3 cities.
WHAT IS YOUR VISION FOR CREDAI IN ENHANCING THE CREDIBILITY AND PROFESSIONALISM IN THE REALTY INDUSTRY?
Our own efforts and introduction of RERA, has helped in consolidation of the industry by sweeping out the small builders who didn’t have the credentials and investments to deliver their projects. But yes, we understand that we needed to generate more faith from homebuyers and investors to spur further growth. Hence, we introduced protocols like a code of conduct for all our members and setting up of a Consumer Grievance Redressal Forum across all our 23 states and 204 city chapters. Going forward, our vision is ‘Transforming Real Estate’ – whether it comes to using technology to sort delivery delays, finding a solution to policy challenges, developing the potential of tier-2, 3 states, using sustainability for good impact and not just perception.
Wait for few years and I am sure given the quality of young talent in the industry and access to right programs, platforms; you will see an even younger Chairman emerge from CREDAI.
WHAT ARE YOUR SUGGESTIONS FOR ADDRESSING THE TAXATION, LIQUIDITY AND FUNDING CHALLENGES FACING THE REALTY SECTOR?
Demonetization, RERA, GST and the Insolvency Code have changed the institutional landscape for all businesses but even more so for the real estate sector. Hence, it is necessary to cushion the real estate industry to face the transition successfully and avoid hard landing.
CREDAI views increasing investments in real estate as necessary to accelerating growth of the economy. CREDAI requests the Government to boost demand by allowing for deduction for principal repayment of housing loan as a separate or standalone exemption under Section 80 C for up to Rs. 5 lakh per annum for five years. Secondly, to induce home buying home loan interest up to Rs.4,00,000/- may be exempted from Income Tax under Sec 24 B.
We compliment the Government for having accorded the status of infrastructure to ‘affordable housing’. However, land as a value of the project cost comprises 40% of the overall project cost of affordable housing project, but land is not eligible for funding by the banks and financial institutions.
In fact, funding of land by commercial banks was permitted by RBI until 2008 and has been stopped ever since. In accordance with infrastructure status of ‘affordable housing, the funding of land for affordable housing projects should be resumed at the earliest.
The goal of Housing for All by 2022 means that we have no more than three years to resolve this challenge. This implies that annual investment in real estate have to be raised multiple times immediately. This is why I feel that real estate enjoys astronomical prospects for growth over the next five years.
WHAT ARE YOUR VIEWS ON THE PRESENT REGULATORY ENVIRONMENT AND WHAT MORE CAN BE DONE?
The passage of RERA and implementation of GST, would enable real estate to fulfil the unmet housing demand as well as demand for other segments of the Indian economy. However, it still takes upward of eighteen months to obtain all approvals for buildings. There is scope for reducing the time taken in according sanctions and approvals for building plans. This would improve the nation’s standing in terms of ‘ease of doing business’ as also reduce the cost to the stakeholders.
Single window building clearance along with digitalization of approval process is some of the ideas which we think can now be taken up for implementation. Section 4(E) of RERA provides for declaration by promoter to obtain all approvals. CREDAI has also recommended that registration under RERA may be allowed once the basic or primary approval of building plans has been obtained by the promoter, with the secondary approvals such as height clearance from Civil Aviation Authority or environmental approval from MOEF being covered under Section 4(E).
WHAT ARE THE STEPS BEING TAKEN BY CREDAI FOR ACHIEVING PMS MISSION OF “HOUSING FOR ALL” BY 2022?
CREDAI has evangelised its members to undertake affordable housing ever since the announcement of ‘Housing for All by 2022’ as a national goal. However, the current definitions of affordable housing are varied. Section 80 IBA of IT Act, GST Act, DEA Notification dated 14.11.2017, Ministry of Housing and Urban Affairs in respect of CLSS and RBI, adopt definitions of affordable housing which vary among themselves.
CREDAI suggests that the affordable housing definition drawn from Credit Linked Subsidy Scheme (CLSS) of the Ministry of Housing and Urban Affairs may be made universally applicable across all agencies of the Government. According to the CLSS, affordable housing comprises units with a carpet area that does not exceed sixty square metres within the cities of Chennai, Delhi, Kolkata or Mumbai and 120 square meters elsewhere.
In the current budget, everything we voiced was looked into. Though we will be able to see the benefit of regulation of HFCs to RBI only in times to come but, I feel, there was no need for putting a cap of 45 Lakhs for availing the additional interest deduction for homebuyers.
ABOUT JAXAY SHAH
After graduating from L.D. College of Engineering, Ahmedabad, Shah gained some valuable experience by working in brick and mortar construction companies in India and abroad, before returning home to set up ‘Savvy’ in the year 1996. The Savvy Group of Companies was conceived as a professional construction conglomerate by Jaxay Shah. Today, he is one of the Directors of the company and the brain behind the changing landscape of Ahmedabad.
Jaxay Shah has been highly instrumental in conceiving and directing the broad strategy and in establishing the company on a reliable reputation in the densely saturated construction market of Ahmedabad. Furthermore, as the newly appointed Chairman of CREDAI, Shah has pledged to fulfill Hon’ble PM of India, Shri Narendra Modi’s dream of “Housing for All”. He has committed to an investment of over 70000 Crores in 373 affordable housing projects through its member developers.
Jaxay Shah is all set to embark on a journey of a ‘Naya Daur’ for the real estate industry against the backdrop of introduction of various policy reforms which are aimed at facilitating the growth. This presents a huge opportunity not just for the members or the industry, but for the entire nation.