Central and State Government is squeezing both the builders and the consumers Says Laxman Jaiswal Chairman & MD of the real estate giant Ascon Infrastructure India Ltd, in an exclusive and explosive interaction and explains how the Central and State Government is squeezing both the builders and the consumers. In conversation Subhojit Roy
Ques: Tell us how both the Governments at the Centre and State are creating an unfair scenario for both the builders and consumers.
Ans: Remember that the Government is a partner in your Business property by holding 99.43% shares without any investment and this is the ground reality of our tax structure in real Estate industry. The Government earns 99.43% and Promoter Earns 0.57% and I can statistically prove it.
The Centre & State Governments are both equally responsible for the decline of the real estate industry.
Ques: What are the reasons for the slump in the Real estate sector?
Ans: There are several reasons for the slump with a negative growth in the real estate sector. According to National Housing Bank data, property prices in Mumbai and Bengaluru increased annually by just about 7.5% and 5.75% respectively between June 2013 and September 20I7. In Delhi, prices actually fell by -0.70% annually during the same period. Beyond the data, we hear numerous stories of investors in distress with their money stuck in delayed projects. There are also stories of many brokers, in fact the entire realty ecosystem is struggling to cope with this slowdown. Demand in real estate started declining from 2013. By 2016, it had hit an all-time low. Above all Profession tax , fringe benefit tax of staff , free gifts to Govt officials which are not even taken into account and then developers are forced to purchase the construction materials from local peoples which are most often highly priced inferior materials. Over and above, NBFC and Banks are also not prepared to help the developers. Even in Denmark, Banks are providing loans on negative interest rate to encourage the Real Estate Business as there are so many ancillary Industry involved in the said business. But the general perception in the minds of public is that of the builders fleecing the customers.
Ques: What should be the road map ahead to bring out the RE Sector from this all time low slump?
Ans: Both the Central Government and the State Government must step in and act fast to save the Real Estate industry and suggested the following measures:
1) Stamp Duty and Registration @8% and GST @ 5% should merged immediately.
2) lnput Credit should be allowed immediately.
3) Real Circle Rate to be imposed after survey of locality by registered survey agency.
4) Transaction to allow minimum 10% + on circle rate.
5) Super Built up area to be abolish in Registration process by state Government which is
also contradictory with HIRA.