Parekh task force asks for housing cess

“We have recommended a cess of 0.5% on all central government taxes, to be credited to a dedicated shelter fund and managed by the NHB," Head of the Task Force Deepak Parekh, who is also the chairman of housing finance company HDFC, said at a national conference of housing ministers here.

“The task force has also recommended that such a fund is reinforced by budgetary support of an equal amount to make long-term impact on affordable housing," he said.

“We have suggested that the government should charge individuals and tax payers 0.5% traditional cess for affordable housing," Parekh said.

Pointing out that the government had imposed a similar cess on petrol to build roads, he argued: “If roads are important, housing is equally important. And 0.5% cess will give additional resources to the government."

In his presentation on affordable housing, Parekh said that the demand for housing has not come down despite economic slow down. He, however, blamed high housing prices for not letting many people buy houses.

“There is nothing more incorrect than to state that people are not buying houses because of economic slow down. The demand has not fallen, it is the home prices that have not fallen enough," Parekh said.

He said that in India, home prices are allowed to escalate for far too long to levels which leave vast number of houeholds out of home market.

The task force has also recommended that allocations under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) be doubled from Rs36,000 crore for providing housing to the poor.

Housing Minister Kumari Selja said that the Government is examining recommendations of the task force.

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