Reddy seeks more aid for real estate

With an aim of reversing the slowdown, Urban Development Minister Jaipal Reddy has sought an additional package for the real estate sector.

In a letter to the Prime Minister, Reddy has stated that “more needs to be done to reverse the slowdown facing the sector”.

Suggesting a slew of measures, Reddy has submitted a note containing suggestions of industry.

“Some of these suggestions with appropriate modifications could be favorably looked into,” he said in the letter to the PM.

The real estate sector plays a dominant role in the country’s economic growth and employment generation.

Unfortunately due to the ripple effect of the global meltdown, the sector is facing severe liquidity crunch. Transactions have come down by almost 80% and the sector which was driving the entire economy has virtually come to a halt.

As a result, most of the developers are facing liquidity crunch on account of financing their long term assets with short term loans.

Seeking rationalization of home loan interest rates, the real estate industry has suggested 6.5% interest for a loan up to Rs five lakh and 7.5% on loan above Rs five lakh and up to Rs 30 lakh.

It has also sought the income tax limit exemption on rental income from house to be increased from 30% to 50% among others to revive the sector.