The Pradhan Mantri Awas Yojana (PMAY) has been designed envisaging a big role for private sector, but no private sector participation has been enlisted under PMAY and private developers remain reluctant in the scheme.
If we analyse, there are several bottle necks and reasons that restrict the private developers. Thus first and foremost is that we have to make these housing projects attractive and a viable proposition for private developers and to kindle their interest to take up.
It must be appreciated that the private real estate sector faces considerable headwinds today. Rising cost pressures and a difficult regulatory scenario are among the primary concern areas that hold back private developer’s participation in a big way.
Coming to the solutions, I would say, approval process should be streamlined. Currently, it takes nearly two to three years for a developer to commence construction after having entered into an agreement for land purchase. There must be transparent digital online approval process taking only minimum time for approval and putting an end to unethical practices. Infrastructure needs to be provided. It will be appreciated that providing infrastructure like road water and sewerage is the obligation of the state and may have to be met out of the Cess and tax collected from the project. If the State can take care of this arena, there shall be more private players evincing interest to take up the projects.
Thirdly, ‘big bang measures’ are necessary.We need measures similar to one brought in 2000 by the then PM Shri Vajpayee by introducing Section 80 IB (10) of the Income Tax Act which aimed at promoting constructions of housing projects. We can undoubtedly say that this was a break through provision introduced bringing in a big real estate revolution particularly in augmenting the housing supply. The kind of measures that were introduced in 2000 will attract private players to participate in the national mission like PMAY in a big way.
M Murali, Managing Director, Shriram Properties