Rationalise licence fee for developers: Assocham

To enable real estate developers build low-cost houses, industry chamber Assocham has suggested measures including rationalising licence fee and disbursing credit on lower rate of interest to developers.      

In a study, the chamber has suggested that land should be made available to developers at reasonable rates across the country under public private partnership model.      

The paper submitted to the Planning Commission, RBI and Finance Ministry also seeks relaxation in existing external development charges (EDCs).      

EDCs levied on real estate developers average by over 50% per annum, it said. In addition, developers pay huge amounts in form of licence fee for projects as well as government levies.     

"These need to be rationalised to enable real estate developers make affordable housing in the range of Rs 5 lakh and so," the chamber said.      

High lending rates of banks is another area of concern for developers, Assocham President Sajjan Jindal said.      

The sector is getting project funding at interest rates hovering in the region of 14 per cent, he said adding that there were also delay in providing housing finance to end users.

"This needs to be rectified on an immediate basis to revive the sector," Jindal said.      

Assocham further said a regulatory mechanism should be put in place so that developers and property agents could not dupe the end users.      

It has also asked that income earned through LCH construction loan portfolio should be exempted from income-tax and fiscal incentives for builders constructing environment friendly houses.