By Accommodation Times Bureau
Kumari Selja, Minister of Housing & Urban Poverty Alleviation and Culture has said that the Union Budget 2012-13 would give tremendous impetus to the development of affordable housing segment. She also said that the fiscal policy environment for the growth of housing sector which was initiated in the Budget of 2011-12 has been further strengthened in the Budget of 2012-13.
She has said that housing is not only economic good but also a social and aspirational good which ignite the spirit of human endeavour. She also said that housing is not only an economic activity but also a felt need to actualise the human potential of the people of the country.
She expressed her gratitude to the Finance Minister for accepting many of the proposed measures for promoting affordable housing such as :
• Permitting ECB for low cost affordable housing projects;
• Setting up Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loans;
• In order to provide low cost funds to some stressed infrastructure sectors including affordable housing, the rate of withholding tax on interest payments on external commercial borrowings is proposed to be reduced from 20 per cent to 5 per cent for three years;
• Investment linked deduction of capital expenditure incurred in the affordable housing business is proposed to be provided at the enhanced rate of 150 per cent, as against the current rate of 100 per cent.
• Construction services relating to residential dwelling and low cost mass housing upto an area of 60 sq. mtr. under the Scheme of Affordable Housing in Partnership are exempted from payment of Service Tax.
She has also said that the continuation of scheme of interest subvention of 1 per cent on housing loan up to 15 lakh where the cost of the house does not exceed 25 lakh for another year; permitting Tax Free bonds of Rs.5000 crore each to HUDCO and National Housing Bank for financing their projects and enhancing the exemption limit for the monthly charges payable by a member of a housing society from Rs. 3000/- to Rs. 5000/-, would provide relief to the middle income segments and also provide affordable project financing to the private developers.
She also expressed her pleasure on the fact that through this Budget, we have moved one step closer to the affordable housing being recognised as one of the infrastructure sectors.
She also said that these steps will go a long way in actualizing the growth of housing sector in general and affordable housing sector in particular, in the country.