The COVID-19 experience has led to new requirements and greater dependence on IT which in turn will empower homebuyers and help improve trust, MoHUA secretary Durga Shanker Mishra said
Stating that the real estate sector will have a crucial role to play in the revival of the economy post the pandemic, Durga Shanker Mishra, secretary, Ministry of Housing and Urban Affairs (MoHUA), has said that the government is keen on infrastructure investment as it will help revive the economy.
“The real estate sector will have a crucial role to play in the revival of the economy post the pandemic; be it in terms of employment generation; contribution in the GDP or the direct multi-sectoral link,” he said addressing a special session of the FICCI 14th Annual FICCI Real Estate Summit.
He also said that the pandemic has thrown up a new set of requirements and that lessons need to be learnt and new strategies thought of post COVID-19.
“We need to think more. With the online system in place you (real estate developers) will be empowering homebuyers and once you do that trust will improve,” he said.
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“This COVID experience has led to new requirements, more dependence on IT… we have to learn lessons from the COVID situation and move forward. We have to ask ourselves the fundamental question of what needs to be done after COVID-19. This is not something permanent but it will be a watershed event. There will be a huge focus on infrastructure,” he said.
“Whenever there has been an economic depression, be it in Japan or the US, infrastructure development has helped in economic revival,” he added.
“The focus and reforms in the real estate sector in the past six years has been unparalleled; be it about ease of doing business or the Real Estate (Regulation and Development) Act, (RERA),” he said.
The government’s focus going forward should be on kickstarting and creating demand in the housing sector. “We should find innovative solutions considering the altering demands in the real estate sector,” he said.
He also pointed out that new technologies for construction of housing have been inducted. “For the first time, with the Global housing Technology challenge, 54 types of new technologies were introduced into the sector. Today, in more than half of the cities across India, there is an IT-based solution for construction permits, he said.
An affordable rental housing complex scheme for urban migrants employed in the industries, service sector and manufacturing sector close to their workplace in industrial as well as in non-formal urban sectors has also been introduced during the pandemic.
“FICCI will have to play an important role in affordable rental housing complex planning, especially social rental housing,” he said.
Industry leaders urged the government to render support in allowing GST to be set off from rent.
Government should take steps to promote the overall sector. Businesses moving from China to India present a huge opportunity and all this will be short lived if the government does not find a quick way of allotting them lands, they said.
“And, for that government should have a plan to take on a few thousand acres for each industry they want to attract in the state. Each one should have a separate park created for which the government needs to think ahead. The government can get these parks developed by getting into joint ventures with private developers,” said Raj Menda, joint chairman - FICCI Real Estate Committee and Corporate Chairman, RMZ Corp.
Also, some states have encouraged reduction of stamp duty until December and March.
“If the central government can encourage all the states to help reduce their stamp duty, it will help customers come forward to register their units. This will generate the much needed liquidity,” he said.
While there is huge demand for a range of housing, housing is taxed almost at three times, said Irfan Razack, co-chair, FICCI Real Estate Committee and CMD, Prestige Group.
Almost 30 to 32 percent cost of the house is passed on to the homebuyer. The government’s focus should be on how we can kickstart demand to promote housing.
“Ministries have to get together to see how stimulation of demand can happen. If that happens employment will be generated as the biggest multiplier of GDP is the housing sector,” he said.Two reports- FICCI-CBRE Report titled Post-Covid-19: The Future of Office and Industrial and Logistics Real Estate in India and FICCI-Colliers Report Future India: Captivating Strategic and Private Equity Investments, were also released during the Summit.