Economy & Market
The sector will double business next year
Ashok Mohanani, Chairman and Managing Director, Ekta World,
says individuals want safer and more comfortable places to live, and the price needs to be affordable.
How successful is the 'Housing for all by 2022' programme? What are the opportunities specifically to your group?
The Pradhan Mantri Awas Yojana (PMAY) was started with the purpose of constructing around two crore houses for the EWS & LIG group by 2022 at the rate of 30 lakh houses per year has yet to pick pace. The scheme has been impacted due to central governments major policies such as RERA and GST. Currently, the market is sluggish but can see upward growth in next quarter and the year 2018 will be for the real estate sector. Affordable housing and Housing for all is the game changer in the real estate and the sector will double business by next year.
With infrastructure status being awarded to affordable housing, it has opened various opportunities to the developers in the real estate sector. The government has presented a much-required push for the Indian real estate segment through various policy implementations. The infrastructural developments and affordable housing policies by the current government will prove beneficial for both the homebuyers and developers.
How is it likely to benefit the cement sector? Do you think cement consumption will increase because of this? If yes, by what percentage and quantity?
The "Housing for All" will not only boost real estate sector but also make others sectors to grow as well. Cement is a vital building material, which keeps a structure intact. The construction industry will see huge need of iron, cement, labour, etc. in the coming years, which will add on to the country's economy. This need will not only benefit cement sector but also the other sectors. India produces around 350 million tonnes of cement annually and is expected to put 550 million tonne by financial year 2020. The demand for cement is steadily on the escalating owing to rapid urbanisation and construction activities. Furthermore, the government's infrastructure development, Smart Cities Mission and 'Housing for All' initiative will further accelerate the growth of the cement industry.
What kind of incentives are provided by the government so that more and more developers participate in the segment of affordable housing?
This year's financial budget has proposed infrastructure status for affordable housing, a long-standing demand of developers, and also increased the allocation for the PMAY from Rs 15,000 crore to Rs 23,000 crore, bringing the country closer to realising the 'Housing for All' mission by 2022. The promoters of affordable housing scheme are getting profit-linked income tax exemption, which has received a favourable response. To brand this scheme more striking and to ensure homebuyers got value for their money, carpet area of 30 and 60 sq m would be counted instead of the built-up area.
Which states are progressing well and providing opportunities for affordable housing? How important is the government decision for public private partnership (PPP) in this space and how it is likely to benefit the affordable housing sector?
If the government is planning to construct 20 million houses in the next five years, then it has to approximately build 2.5 million houses each year. Currently, the progress of this scheme has been slow due to host of factors including demonetization, RERA and GST. The states that have comparatively progressed well in the country are Madhya Pradesh, Tamil Nadu, Gujarat, etc. The decision to introduce PPP was to push affordable housing. There are around eight PPP options available for the private sector to invest in affordable housing segment. This has opened potential for private investments in affordable housing segment on government lands in urban areas. The private sector so far was pushing itself back from entering in affordable housing segment despite huge scope under PMAY and this has put an eco-system in place through which the developers will receive several concessions and incentives offered as per PMAY norms.
Affordable housing requires fast pace work completion. In this situation do we see inclusion of new technologies? What are these?
Rapid growth in population is resulting in a serious demand for new infrastructure in India;housing being a basic requirement, needs focused attention and quicker ways and means of delivery. Individuals want safer and more comfortable places to live, and the price needs to be affordable. Indian property developers are adopting international strategies like pre-fabricated construction, dry-wall techniques, and slip-form construction and Mivan shuttering for quick development, there's a need to cut back the value of procurement of recent technological instruments and alternative products and materials. Value engineering and rationalisation of the over head costs can facilitate the sector vastly in bringing down the value of affordable housing units.
What are the factors driving affordable housing in India? How do you think has been the responses of private sector to the scheme? What further changes you desire to have?
Online tools for time-bound approvals for building plans and construction permits has already been introduced in Mumbai and Delhi and the same would happen shortly in addition 53 cities. The government's recent announcement of PPP policy to push investment in affordable housing by giving incentives to private developers augers well with its mission to provide "Housing for all 2022",furthermore, it has opened potential private investments in affordable housing projects on government lands in urban areas. This policy seeks to assign possibilities among the government, developers and financial institutions, to people who can manage them the best besides leveraging under-utilized and un-utilized private and public lands towards meeting the target of Housing for All.
- RAHUL KAMAT