Industry experts believe that the government’s decision to offer 100 per cent tax exemption on profits made by builders in 30 square meter flats is likely to speed up the process of providing housing to the economically weaker sections in the capital. Comprising over 51 per cent of the city slums, the Delhi Development Authority (DDA) will reap the maximum benefits.
According to a DDA official, the tax exemption is likely to lure private builders into the Public Private Partnership (PPP) model with more focus on redevelopment of in-situ slum such as Kathputli colony. The official added that the capital has over 675 slums with a population of over 1.5 million.
Spanning an area of over 5.22 hectares in the capital’s Anand Parbat area, Kathputli Colony boasts around 2,800 independent living units developed by Raheja Builders. These units have been transferred to the DDA in lieu of remaining vacant space to be used by the developer for commercial and residential purpose.
The Delhi government, however, stated that the above scheme would not really help their existing projects as they are totally based on direct investments. Commenting on how this would not be of any help to the projects owned by the Delhi government, V K Jain, CEO, Delhi Urban Shelter Improvement Board, said that the plan is to use lands as a resource and sell off its portions to rake in money to build houses for the population living in slums. The other plan suggests using 60 per cent of the total land for building houses while 40 per cent will be used as a resource to generate money. The contractors will be roped in for building houses and no dealing will be done with any private builder.
The development has enticed the builders to be part of PPP projects, albeit with a limited scope. Manoj Gaur, president of the Confederation of Real Estate Developers’ Association of India (CREDAI) NCR, said that the government’s decision to invite builders for the project is a great opportunity, which will also turn the tides in favour of builders who were by far foraying into satellite cities. He also asserted that there is a huge difference between Delhi and Mumbai model as Mumbai is all about high-rises.