The Hindu Business Line : `Infrastructure status for housing can make access to funds easier'

ACCESS to low-cost institutional funds could become easier for real estate developers in the country, if a proposal to confer infrastructure status on housing sector is accepted by the Government.

The Ministry of Finance has already been forwarded a proposal to this effect by the Ministry of Urban Employment and Poverty Alleviation, sources said.

The industry has long been seeking infrastructure status for real estate on the grounds that housing formed the backbone of economy. "We have been writing to the Government that housing be treated at par with infrastructure, and attract similar incentives. Real Estate is a part of infrastructure development," Mr Kumar Gera, President of Confederation of Real Estate Developers' Association of India (CREDAI), said.

According to the real estate consultant Knight Frank India Chairman, Mr Pranay Vakil, the proposal would enable developers to borrow at cheaper rates. "The borrowing norms for developers will be softer if the sector is granted infrastructure status. As per rough calculation, it would make a difference of about two percentage points in borrowing rates. Further the debt, equity ratio would also change. In addition, this would mean more tax breaks for the players," Mr Vakil said.

Terming housing as a `fundamental need', Mr Dinesh Chandiok, CEO of Ansal Properties and Infrastructure Ltd, said that grant of infrastructure status to the housing sector would facilitate access to low-cost institutional funds. "Raising funds is a key issue in our business, and infrastructure status to housing sector would put us at par with others," he added.

Parsvnath Chairman, Mr Pradeep Jain, said that the benefits that may come to developers as part of the infrastructure status would ultimately get passed on to consumers.

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