The Hindu 23.03.2016
Tax exemption to builders may boost EWS housing
The DDA, which has about 51 per cent of the city’s slums under it, is likely to benefit the most
The Centre’s proposal of giving 100 per cent tax exemption on profits to builders for projects with flats of up to 30 square metres in metropolitan cities will accelerate housing for the economically weaker sections (EWS) in the Capital, believe experts.
According to various stakeholders, the Delhi Development Authority (DDA), which has about 51 per cent of the city’s slums under it, is likely to benefit the most. “The tax relaxation is going to attract more private players to engage with us under the Public Private Partnership (PPP) model. This will help conceptualise more PPP projects of in-situ slum redevelopment like the one in Kathputli Colony,” said a DDA official. Delhi has 675 slums, which are home to over 1.5 million people.
Spread over 5.22 hectares in Delhi’s Anand Parbat area, popularly known as Kathputli Colony, private company Raheja Builders had developed 2,800 dwelling units at the existing slums and handed it over to the DDA. In turn, the developer was given the remaining free space to be used for commercial and residential purposes.
The Delhi government, on the other hand, maintained that the scheme wouldn’t be of much help to their projects as they are based on direct investments. Explaining how the proposal cannot be implemented on Delhi government projects, V.K. Jain, CEO of the Delhi Urban Shelter Improvement Board (DUSIB), said: “Our plan is to use land as a resource where parcels of it will be sold and the money will be pumped into building houses for slum dwellers. The second type is where we will use 40 per cent of a land for generating money, while the remaining 60 per cent will be used for houses. The housing work will be given to a contractor and there shall be no dealing with any private builder.”
Following the tax exemption, developers have expressed interest in participating in such PPP projects, but maintained that the scope would be limited. “If the DDA or the Delhi government ropes in builders, it would be a nice opportunity for us. It would help set a reverse trend at a time when builders are moving out of Delhi to satellite cities. But we must keep in mind that Delhi is different from the Mumbai model, on which the proposal is largely based. While Mumbai focussed on high-rises, that is not the case in Delhi,” said Manoj Gaur, president of the Confederation of Real Estate Developers’ Associations of India (CREDAI), NCR.
