Builders, activists at crossroads

The announcements made in the Union budget for the housing sector has also received a mixed response from public housing sector officials and realty industry experts in Mumbai. While the limit on housing loan was increased from Rs 20 lakh to Rs 25 lakh the rate of interest on the loans was decreased by 1 per cent while the loan amounts have been increased from Rs 10 lakh to Rs 15 lakh.

The State housing officials feel this would facilitate in creating solutions for the housing problems, not only in the city but entire the country. " I think the budget would solve the housing problems of the people to a very large extent as the provision of increasing the bank loan amount from Rs 10 lakh to Rs 15 lakh and increasing the loan limit from Rs 20 lakh to Rs 25 lakh, and fulfil the dreams of many home seekers" said Amarjit Singh Manhas, chairman of the Mumbai board of MHADA. The housing activists are also satisfied with the budget as they feel many people from the lower income groups could avail of the benefit of the new provision.

"The announcement of increasing the limit on loan amount would help many people who are interested in purchasing small and cheap houses," said housing activist Ramesh Prabhu.

However, some builders feel that the housing sector has been neglected completely by the budget. While there was no exemption given to the builders who undertake rental housing project, the agricultural sector is being pampered with electoral tinged sops. " In today's date there are no houses available for Rs 15 lakhs and hence there is no point in reducing the interest rate by 1 percent. There is also a provision for of Rs 3,75, 000 crores for agricultural sector which is an electoral politics gimmick. Had the State made a similar monetary allocation for the housing sector, it would have solved all the housing issues" said Anand Gupta, President Builders Association of India.

Maharashtra Chamber of Housing and Industry (MCHI) was satisfied with the reduction of interest rates but felt that some demands raised by them were not met. " The members of the MCHI were expecting the restoration of 80 IB of income tax in respect of residential units measuring less than 1,500 sq ft area, easy accessibility of funds for project execution, permission of External Borrowing (ECB) for funding of real estate projects, granting a infrastructure status to all the redevelopment project and withdrawal of service tax on real estate, however none of these demands have been addressed in the budget," said Sunil Mantri, President, MCHI.