Vice President M Venkaiah Naidu has said that Real Estate Sector to take corrective action to curtail unethical practices followed by certain players. Pointing out that the sector had come under severe scrutiny by the apex court and statutory Consumer rights bodies, the Vice President asked bodies like the CREDAI to institutionalize an internal self-regulation mechanism.
He was addressing young entrepreneurs and professionals at the 3rd YouthCon organised by CREDAI shared his thoughts and expectations with the young entrepreneurs in the real estate sector.
VP Naidu opined that the growing NPA in real estate had not only affected Banks but also dried up Bank loans to the sector from 63% in 2013 to 17% in 2016, thereby accentuating the stress.
You owe as much to your customers and the workers as you do to creditors and suppliers. More than financial viability, it is social obligation and trust that is at stake, he said.
Talking about the role and importance of the Real Estate sector, the Vice President said that it contributes 7.9% to the GDP of the country and provides employment to more than 50 million people in the construction sector.
Shri Naidu said that the sector was essential for healthy, inclusive and equitable growth of the economy. He added that programmes like AMRUT, HRIDAY and the pioneering initiatives like 100 Smart Cities, Housing for All by 2022 and PMAY present a great opportunity for the sector. He wanted organisations like the CREDAI to take lead in imparting the skill-sets required for these new employment opportunities.
Shri Naidu said that a transparent and predictable regulatory regime was essential to strengthen the real estate market by creating greater confidence in the consumers. He opined that measures like RERA and GST that were implemented after the wide-ranging consultative process were showing signs of revival in the sector.
The Vice President said that India has been recording an impressive growth rate owing to the enabling policy environment and legislative architecture created by the government to promote enterprise and innovations.
“India’s growth performance has been quite impressive. Year after Year it has delivered strong numbers around its potential growth”, he said quoting World Bank.
Saying that India was increasingly becoming a Tax compliant society, he opined that implementation of GST, a rise of 50% in tax base post-GST and increase in the filing of Income Tax Returns were indicative of such change.
He called upon the Central and State Governments to resolve these difficulties to facilitate a steady growth in real estate sector by solving the difficulties existing in the registration of properties.
The Supreme Court has acknowledged Right to Shelter as a Fundamental Right included in Right to Life under Article 21 of our Constitution.
The Vice President stressed upon the need to create affordable and adequate shelter in urban habitats to the increasing influx of population that is moving out of villages to explore better opportunities. Pointing that there was a shortage of 19 million housing units in India, he said that 96 per cent of those affected by this shortage were people belonging to Economically Weaker Sections and Middle Income Groups.
Quoting the recent report of CAG on Real Estate sector, the Vice President said that 95% of the real estate developers, builders and agents did not have mandatory PAN. He also pointed to surveys from the sources like CREDAI and RERA and said that out of around 3000 entities surveyed, more than 500 didn’t file Income Tax Returns.
Saying that the CAG Report must be the point of reference even for the industry, Shri Naidu wanted the industry to promote digital transactions and enhance transparency and ethical facet of the sector.
Shri Naidu suggested organisations such as the CREDAI to provide certification to construction workers after providing them 12-80 hours of orientation and bridge course under Recognition of Prior Learning Scheme. He also wanted them to promote the pension scheme proposed by the government for people employed in the unorganized sector and enrol construction workers in the Scheme.