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Give us our pound
of flesh, say the real estate developers
By N.G.P. Nair
Here is a wake up
call to the governments both at the state and central level to come to the
rescue of genuine seekers of living accommodation particularly in the
metros. The grievance is that he builders are jacking up prices to sky-high
at any given opportunity without rhyme or reason with an accompanied
posture, take it or leave it. They very well know that the demand is more
than the supply and a laissez-faire operation can continue until and unless
intercepted. Only our government alone can enact the required law leading to
a control of the accommodation prices and thus bring builders’ lobby to come
of their senses.
Control on
distribution : As all of us know that our authorities have taken or are
taking corrective measures from time to time for the common good of the
people when scarcity surfaces in any other segment. For example take a look
at the situation with food grains, cooking oil, clothes, kerosene and many
others essential household items. On one side the government ensures
adequate supply and on the other declares a fair price to make these items
available and thus get them within the reach of the common man. Evidently
the government safeguards us from getting exploited by the unscrupulous
traders by issuing ration cards. But the system is in place and continues as
a defense mechanism against exploitation.
A fair step (ULCR) :
The Central Govt. in all fairness repealed the act of ULCR (Urban Land
Ceiling Regulation Act) to ensure equitable distribution of surplus land in
Mumbai, the land meant for constructing houses for the weaker sections of
the society. Surprisingly, the Maharashtra Govt. has so far not implemented
the central government order for the reasons best known to them. Naturally,
the lower middle class and those below that level for whom such houses are
supposed to be constructed and allotted using such surplus land are deprived
of. An individual is eligible only for 500 to 1500 sq. meters of such land
and the remaining area is treated as surplus land. This excess land should
go for the benefit of the weaker sections. The builders and trustees who
hold several acres of excess land under the purview of this Act in Mumbai
are doing a day light robbery, evidently to the detriment of the weaker
sections.
Interest rebate for
IT on Housing Loan : No doubt our governments have done quite a bit to
giving us the facility in buying accommodation. To the specific the finance
ministry incorporated new rules in the Income Tax Act about tow years ago,
thereby giving more incentives to housing loan seekers. The market prices
were stable in those days as only genuine purchasers alone were involved in
booking of flats and other premises in Mumbai.
Stamp Duty slashed :
The Maharashtra Govt. slashed the stamp duty on housing transfer
documentation from 10% to 5% as applicable to property valued at Rs. 5 lacs
and above effective 1st of September 2005. And for commercial and
freehold land the govt. out rightly brought down the stamp duty from the
then prevailing 10% to 5%.
Of course a good
number of accommodation seekers took timely advantage of our government’s
largesse. But alas! This new situation had its backlash as smart operators
found this to be a good investment proposition with hardly any risks and
side by side prices started moving upward this flagged off the initial boom
in the real state market and builders, even the reputed ones said bye-bye to
all business ethics and started boosting up the prices as the demand
continued to be more than the supply.
Employment of heavy
pay package : Take a look at the demand side. Popularly known as the gold
rush the IT and IT-enabled industries besides their close ancillaries
generated employment opportunities of an unprecedented nature. This enabled
the upward mobile qualified youngsters popularly known as yuppies to land
jobs at a heavy pay package in the metros. This situation created a huge
amount of disposable income a large part of which has entered the housing
market.
Limited supply of
housing :
Certainly we welcome this healthy trend as it
further upgraded the requirements in housing accommodation in places
particularly in the metros like Mumbai, Pune, Delhi, Kolkata, Bangalore and
Chennai. But unfortunately this resulted in the prices of accommodation to
shoot up almost double since a year and a half as the demand went spiraling
against limited supply. Perhaps the builders during this period have had to
pay an increase of ten to fifteen percent or less for the throughputs like
the cement, steel, sand etc., that go into the construction but it there is
no justification to boost the prices to unreasonable levels, say double or
even triple. This is pure exploitation, call it racketing in the worst form.
Government has to take heed of this situation and take immediate remedial
measures.
Updated 8th January 2007 |
