New NAREDCO president G Hari Babu seeks interest subvention on home loans

New Delhi [India], October 13 : The newly-elected National Real Estate Development Council (NAREDCO), G Hari Babu, said interest subvention on home loans will help to boost demand in real estate at large, and affordable housing in particular, and noted he would closely work with the government and represent the issues facing the industry.
"The government should encourage the buyers...People who are taking loans up to Rs 10 to Rs 12 lakhs, if they get at 1.5-2.0 per cent (after subvention benefits), the industry will tremendously grow," he told reporters on Friday, suggesting at least 6 per cent interest subsidy.
"If the customer is taking Rs 12 lakh as loan, he/she should be eligible for entire loan amount with 6 per cent interest subvention so that the repayment burden is less," Hari Babu, who has taken the baton from Rajan Bandelkar, said.
Noting that the government receives a considerable chunk of tax from the real estate sector, he suggested giving it back to the industry through interest subvention.
"Give back to the same industry for the poorest of the poor. Interest subvention is the best way...so that the industry will keep on growing," he said.
Speaking about affordable housing, he said ideally one unit costs Rs 30 lakh, largely on the outskirts of any city.
The newly-appointed President expects the contribution of real estate to the overall GDP will be 20 per cent by 2047, as against an estimated 13 per cent at present.
During his tenure as the president, he said he would work on increasing its presence and onboarding more memberships. At present, NAREDCO has 10,000 odd members, and most of it is concentrated in the western part of India and two Telugu-speaking states.
"Internally, we want to expand our membership and we want our NAREDCO's presence in every state and all the cities," he said.
He said he intends to start more NAREDCO chapters, taking it from 12 states now to about two dozen. Not just at the state level, he wishes to form city chapters as well.
He aims to raise yearly growth for the real estate sector to 18 per cent year-on-year as compared to 15 per cent now.
Asked how the government should auction lands to developers for construction purposes, he suggested fixing per unit cost of the end product during the auction of the land parcel itself, so that the cost of affordable housing projects for the common people does not overshoot.
Also, among his suggestions to help people so that they can afford to purchase an affordable housing unit, he said the governments should encourage industries to provide inputs - such as cement and steel - to developers at concessional rates.
"The government should encourage the industries that if somebody is coming up with affordable housing projects, they will provide their excess capacity to the developers," he said, citing that some cement companies in Andhra Pradesh are voluntarily supporting affordable housing projects.
Further, he said NAREDCO is negotiating for bulk buying of lifts, motors, and cables.
"We are collecting the information about what are the things they need, how many they need...After collecting the information, we are negotiating for the best price," he said, adding that volumes help in getting discounts.
Among other things, he said he would work closely with the government for title insurance of lands.
"All developed countries have land title insurance. The day you buy the land, you can get the title insurance...," he noted. He said the lack of land title insurance and digital records of land leads to higher litigation.
He said land title is key to India's journey in its quest for a developed nation tag by 2047.
"Record the details of all the (owners) and the co-owners that this land belongs to these pattedars. Once this is completed and no claims are made, that land is litigation-free. No courts can entertain any case on that particular land," he explained.