New Delhi: Key policy makers led by Montek Singh Ahluwalia, deputy chairman of the Planning Commission, on Wednesday said housing companies should not expect any tinkering with the monetary policy to support an asset boom in the real estate sector.
“Ahluwalia, while admitting that the sector needs some kind of stimulus, has asked representatives of the National Real Estate Development Council, or Naredco, to submit a list of their concrete demands on Thursday. He will then take these up with Prime Minister Manmohan Singh,” said a senior government official present in the meeting, who did want to be identified.
Firm stance: Planning Commission’s Montek Singh Ahluwalia. Manvender Vashist / PTI
Naredco, a realty lobby, has urged the commission to look at restructuring debt as the government has given no clear direction to banks for such recasts, Rohtas Goel, council president and chairman of Omaxe Ltd said. The council has also sought a cut in rates to 6.5% for home loans up to Rs 5 lakh, 7.5% for loans between Rs5 lakh and Rs30 lakh, and 9.5% for those above Rs30 lakh.
Builders also said 9.5% interest rates be extended to loans up to Rs30 lakh instead of the present upper limit of Rs20 lakh.
Naredco also wanted section 80 IB (10) of the Income-tax Act restored for houses less than 1,500 sq. ft to generate interest of developers in so-called low income group housing. Income-tax deduction was available to developers until 31 March 2007.
Real estate company chiefs including Rajiv Singh, vice-chairman of DLF Ltd and Pradeep Jain, chairman and managing director of Parsvnath Developers Ltd attended.
Government officials, however, said banks already have a high exposure to the sector.