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Affordable Housing is possible…- By Prem Nath

On the occasion of the Accommodation Times' 24^th Anniversary & Annual Awards Presentation Function held at Nehru Centre Auditorium on 2^nd March 2010; Ar. Prem Nath contributed his views to the symposium on “Affordable Housing”in the presence of eminent personalities like Shri. Pravin Doshi - President – Maharashtra Chambers of Housing Industry, Shri. Santosh Rungta - President – CREDAI, Shri Niranjan Hiranandani & Shri Biren Parikh- Ernst Young. Prem Nath voiced that Affordable Housing was the need of the hour & it would be an achievable goal if certain changes/ modifications were made in the existing situation, some of them are as follows:

• The responsibility of Affordable housing should be taken up the Govt.

• It (Govt.) should in-fact encourage the Public-Private Partnership (PPP) to carry out housing project.

• Relaxation in approval norms and simplification in procedures to benefit/ promote such developments.

• Additional FSI at concessional rates again to promote such developments.

• Relaxation in various regulations & taxes like Service tax, property tax, VAT etc.

• It should be treated as Infrastructure Projects, with Tax Rebate incentives

• Funding should be with Low Interest rates

• There should be subsidy on electricity and water-supply costs.

• The government should provide fiscal incentives.

• Providing Micro-finance to lower income group with an average ticketing size of Rs. 3-6 lakhsas the consumers usually don't have tax returns or salary slips.

• With the example of the famous Wal-Mart super stores. Ar. Prem Nath explained how Wal-Mart became what it is today. Being the world largest consumer store, it sells quality goods to consumers at affordable prices; whether it is a boom or a melt-down. It works on massive procurement at low price, & sells at low margins but massive volumes makes Wal-Mart as the richest corporation.

• Construction industry must get together in a corporate manner to cut down the cost of construction by adopting modular construction techniques, organized bulk procurement and also by reducing cost of marketing, advertising & finance etc. Further more, by cutting down the speculative profits to low profits. The profit lies in bulk procurement.

• Similarly adopting Wal-Mart model, Real Estate Industry can form an enterprise with an agenda to provide Affordable Housing.

Ar. Prem Nath also added that there is a demand of 20million affordable homes having average cost of Rs. 2 million worth, makes 500 billion dollars of business. Mumbai alone has demand of one million affordable houses of about Rupees 2.5 lakhs croresof business opportunity for next 5 to10 years.