Realty needs more sops; package not enough: Jaipal Reddy

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The Minister for Urban Development Jaipal Reddy is not too happy with what the second stimulus package has to offer to the real estate sector. He has written to Prime Minister Manmohan Singh seeking more sops for the sector. CNBC-TV18's Economic Affairs Editor Vivian Fernandes reports.

 

Here is a transcript of Vivian Fernandes's comments on CNBC-TV18. Also watch the accompanying video.

 

Not everybody is satisfied with the stimulus package that was announced on Friday, and among them was Jaipal Reddy who said the real estate sector has seen demand come down by 80% and wants demand to be stimulated.

 

In a letter originally written to the PM on Thursday, a day before the package came out, Reddy wanted banks to lower interest rate on home loans from 9.25% to 7.5% for loans up to Rs 30 lakh. The minister also asked for the doubling of income tax rebate on home loan interest to Rs 3 lakh and income tax exemption on rentals to be raised from 30% to 50%.

 

Reddy also wanted the restoration of Section 80 1B 10 income tax concession to real estate developers. The minister also wanted banks to restructure loans to real estate players as this will help iron out asset-liability mismatches.