Parekh favours fast approval over tax sops for low-cost houses

Pitching for immediate change in archaic government rules to give a boost to low-cost housing, housing finance major HDFC's Chairman Deepak Parekh has favoured fast-track approvals over the tax sops to developers.

"It makes imminent sense to have a single window approval mechanism for affordable housing projects where the per unit cost is under Rs 10-15 lakh. A time bound, fast-track approval process is clearly a preferable option over lobbying for tax sops," Parekh said.

In his annual letter to shareholders of the country's largest housing finance provider HDFC, the eminent banker said that the home prices could certainly be brought down, as has been the case for telecom and automobile sectors.

Pitching for incentives from the government to build affordable housing projects, Parekh said the developers of such houses should not be subjected to multiple approvals and the subsequent delays and cost overruns.

He also suggested urgent changes in the government rules to make low-cost housing a commercially viable proposition.
    
Putting forward a 'five point doable housing agenda', Parekh said there was "a need for a complete overhaul in archaic land laws" and the gravity of the situation was fast reaching a critical tipping point.
    
The five points presented by him include merger of the urban development ministry and the Ministry of Housing and Urban Poverty Alleviation, streamlining all existing government housing finance programmes and incentives for affordable housing projects.
    
Besides, he has also called for compulsory implementation of e-auction for land transactions and a special 'Settlement Commission' for the Urban Land Ceiling & Regulation Act (ULCRA) cases.
    
"These baby steps will go a long way in alleviating the housing problems in India," Parekh said.
    
"Housing continues to remain out of the reach of the common man... What is more important at this juncture is to recognise that affordable or low cost housing is commercially viable, provided the enabling environment is conducive," he added.
    
"India has seen success in frugal innovation across various sectors -- automobile, consumer products and telecom. So the question is, why not in housing?," he said.
    
Parekh suggested putting in place sufficient financial resources, a strong urban governance framework and political will to push for sufficient affordable housing.
    
He said it was encouraging to note that there were a handful of new and existing developers who have demonstrated this and they must be incentivised to continue participating in this segment.