Affordable housing cap needs rethink, says Credai's Shekhar Patel

With escalating housing costs, the government should reconsider the ₹45 lakh cap defined by the government for affordable housing, which was last set in 2019, said Shekhar Patel, president of the Confederation of Real Estate Developers Associations of India (Credai).

 

“The ₹45 lakh home in 2019 has now become ₹75 lakh, according to the Reseve Bank of India’s housing price index and other data that show that the costs have escalated. There should not be a price limit,” Patel, who is also the managing director of Ahmedabad-based Ganesh Housing Corporation, told Business Standard.

 

The Credai president said that while the size limits of 60 square meters for metro cities and 90 square meters for non-metro cities were generally acceptable, the price cap was deterring developers. Credai represents nearly 12,000 real estate developers.

 

He added that the government can make housing affordable for buyers by reducing the goods and services tax (GST) on affordable housing projects from the current 5 per cent to a more favourable 1 per cent, which will make the projects more financially viable.

 

“Implementing a uniform stamp duty rate of 4 per cent across all states in India will simplify transactions and reduce costs for renters and landlords,” he said.

 

The demand is among a handful of reforms that the industry body is seeking from the government, even as it pushes to develop strategies to address labour shortages and use of data analytics and AI for improving building practices.

 

The industry body plans to collaborate with the housing ministry and Real Estate Regulatory Authority 

 

(Rera) to establish a dedicated data analytics centre at its Delhi office, which will mine and analyse data, particularly from Rera databases, to provide valuable insights.

 

“These insights will be shared with various stakeholders, including developers, homebuyers, and the government, to support better decision-making and strategic planning,” Patel said.

 

Patel added that the industry will establish a Skill India Council that will introduce programmes to re-skill the workforce, which will also address the issue of labour shortage to some extent. He noted that real estate, construction and infrastructure employed about 5 crore workers combined and there was little growth in that labour pool.

 

“There will be on-site skilling for 10 days. The programme has been identified for masonry, carpenters, flooring and other jobs, and has been certified by the skills ministry. It will certify the workers who can then earn more wages,” he said. About 100,000 workers will be trained in the first year and 10,00,000 in five years. The programme, which will begin with 25 cities, will be funded by the industry’s CSR and other funds.

 

Adoption of new construction technologies, such as precast and prefab construction methods, will also be promoted to accelerate project completion and reduce overall construction costs.

 

“The goal is to reduce project cycles from seven years to three years,” he said. For improving ease of doing business, the body is looking to streamline processes to reduce the time taken for project approvals ranging from six months to two and a half years today to a target of approximately 100 days.

 

Credai will also set up a Green India Foundation to promote the adoption of green building certifications where the body will support in bearing the cost of getting the certifications, if it is too high. It will also undertake significant reforestation efforts, including planting 10 million trees each across more than 10,000 acres in the Western Ghats and Aravalli mountain ranges.