INRnews - Indian Real Estate News

The government proposes to build 800,000 homes for lower and middle-income groups over the next three years. Incentives will be offered to developers to build this housing. Also the government proposes to extend the cluster approach of slum redevelopment whereby each cluster would have complete facilities like schooling, healthcare etc., and would be developed based on competitive bidding. Credit Rating from CRISIL or ICRA would be mandatory for those developers bidding for slum redevelopment.

A key measure proposed s to increase FSI from 0.5 to 1 in areas outside municipal limits. The government has also proposed to drive transparency in the pricing of flats by insisting on carpet area as the basis for pricing rather than built up area. Analysts do not expect a fall in prices from the shift to carpet area, as they expect the cost of the flat to remain the same. The built-up or super built-up area adds as much as 25-35 per cent of the total area of a flat. Developers are likely to simply charge a higher price per square foot of carpet area versus the earlier built up area price.

A housing regulatory authority has been proposed to address complaints.

In a move aimed at decongesting Mumbai, the government has also proposed that transferable development rights for land acquired in Mumbai can be used anywhere in the Mumbai Metropolitan Region. 

The policy though does not touch upon reform of the rent-control act, an archaic piece of legislation that is preventing a significant amount of housing stock from coming into the market.