In its forthcoming mid-term appraisal, the Planning Commission is poised to unveil a pair of new schemes aimed at elevating the real estate sector's priority status during economic downturns, with a specific focus on fostering "affordable housing." This announcement came during the ASSOCHAM National Conclave on Threats Facing the Real Estate Sector—Exploring Potential Solutions—held today. Mr. Harish Chandra, the Housing & Urban Development Adviser in the Planning Commission, disclosed that the Cabinet Secretary has already initiated a meeting of all States to brainstorm solutions to rejuvenate stressed sectors, including real estate, although he refrained from revealing the meeting's scheduled date. However, he did affirm that the mid-term appraisal of the Planning Commission will commence immediately after the upcoming Parliamentary elections conclude.
The unveiling of new schemes is anticipated during this mid-term appraisal process, even if it necessitates deficit financing, as the Commission is set to engage in extensive consultations with industry associations, such as ASSOCHAM, according to Mr. Chandra.
He pointed out that through previous efforts, the Planning Commission, along with the RBI and the Finance Ministry, has jointly implemented a series of measures to restore confidence in the Indian economy. It is expected that additional initiatives will also be revealed by the Commission once the proposed mid-term appraisal wraps up, indicating a potential reduction in interest rates conducive to promoting affordable housing.
Meanwhile, a collective of Chief Executive Officers representing prominent firms including Omaxe Ltd., Raheja Developers, Pioneer Urban Land & Infrastructure, and Jones Lang LaSalle Mehgraj publicly opposed the infusion of foreign direct investments (FDI) into the real estate sector during an ASSOCHAM-organized conference.
Omaxe Ltd.'s CMD, Mr. Rohtas Goel—who also leads the ASSOCHAM Real Estate Committee—argued that allowing FDIs in real estate would not contribute to an increase in the supply and demand for affordable housing. He warned that their involvement would inflate land prices and urged that FDI in real estate be discouraged, as it poses a significant threat to affordable housing prospects. He called for a transformation in the current model that has left the real estate sector in a precarious state, advocating that of the Rs. 40,000 crore allocated for infrastructure development, Rs. 10,000 crore should be designated specifically as a subsidy for the real estate sector to make affordable housing achievable.
Mr. Goel announced plans to provide affordable housing, revealing that the first identified site is in Indore, with intentions to widen the initiative to other cities across the country, including Chandigarh, Ludhiana, and Jaipur.
On the same platform, Mr. Navin Raheja, Managing Director of Raheja Developers and Senior Member of the ASSOCHAM Real Estate Committee, reiterated his opposition to the entry of FDI into the real estate market, expressing concerns about the potential escalation of land prices and the resulting constraints on affordable housing. He emphasized that the currently strained real estate sector is expected to rebound within the next two to three months, as developers rally to construct homes to support all stakeholders involved in the business.
Additionally, several other speakers at the event, including ASSOCHAM Secretary General Mr. D S Rawat, former CMD of HUDCO Dr. P S Rana, Mr. Pankaj Renjhen, Managing Director for North India at Jones Lang LaSalle Mehraj, Mr. Kuldip Chawla, Vice President of Red Fort Capital, and Mr. Shashikant Arora, President of the Association of Certified Realtors of India, collectively advocated for another stimulus package to support the real estate sector.