HDFC Chairman Deepak Parekh Proposes Agenda for Low-cost Housing

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With a preference to affordable housing and bridging the demand-supply gap, the chairman of Housing Development Finance Corp. Ltd (HDFC), Deepak Parekh, proposed a housing agenda. Five main points were focused in his statement to shareholders in HDFC’s annual report for the fiscal year 2010-11.

  • Integrated ministry for housing and urbanisation
  • Settlement commission for cases under ULCRA
  • Incentives for affordable housing
  • Changing the government housing finance schemes
  • Mandatory e-auction for land transactions

He proposed a single ministry for dealing with housing and urbanisation and preferred a merger of the Urban Development Ministry and the Ministry of Housing and Urban Poverty Alleviation. It was claimed that the merger of the departments should be done at state levels for promoting an efficient urban planning and housing development.

It has been a decade in the repeal of the Urban Land Ceiling and Regulation Act. However, still many properties were found to be litigated and stuck in dispute under this act. With an aim to provide a solution for these cases, the set-up of a settlement commission has been proposed. This would help in letting the properties free, which otherwise would have been kept away from the supply of urban space for development.

He imposed the necessity of providing incentives for affordable housing projects. It was suggested that the developers of these houses should not be subjected to multiple approvals to avoid the subsequent delays and cost overruns. A fast-track approval process was preferred for affordable housing instead of lobbying for tax sops.

He even called for repairing or streamlining the current government housing finance schemes. He insisted on the need for a change in the archaic land laws.

Last, but not the least, the chairman expressed the necessity of implementation of e-auctions for land transactions. This is to ensure a transparency in land sales by government agencies. It is common that an open auction process reduces the chances of right price for the seller because of the threats by the underworld. He said that the e-auction mechanism would leave no space for discretion and arbitrary dealings.

The agenda, on the whole, is mainly focused on low-cost housing projects. It was suggested by the expert that many housing problems in India would be alleviated with these simple steps.

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